No, Toyota is not squashing Suzuki

Cklmej6zo00jp0np7eyyeu74s 0101010258 Exterior 7 Desktop

Does the local arrival of the 2nd Suzuki product to wear a Toyota badge preview a bleak future for Suzuki Auto SA? While there is a limit to the Japanese brands' model-sharing agreement and Suzuki is doing quite well on home soil, Toyota SA has arguably got the better deal in the long run. 

Late last year, Toyota SA introduced the Starlet budget hatchback in South Africa to replace its long-serving Etios; it was instantly recognisable as a rebadged Baleno – an honest, if unremarkable, Indian-made model that Suzuki Auto SA launched in Mzansi in late 2016.

The Starlet not only rolls off the same production line in India as the Baleno; the models look virtually identical.

Whereas the Baleno hardly troubled the new vehicle sales stats during its first 4 years on the market, the Starlet, which is almost identically specified to its Baleno twin, achieved immediate success. To illustrate my point: In the few months that the Starlet was on sale in the Republic in 2020, Toyota sold almost 6 times as many units as Suzuki did of the Baleno for the entire year. The Starlet even bagged a #CarsAwards category win at its 1st attempt.

Now, following hot on the heels of the local launch of the Suzuki Vitara Brezza budget crossover, comes the Toyota Urban Cruiser. It’s the same story as above, even if the models don’t look as near identical as the Baleno and Starlet. But whereas the Baleno never sold well (for Suzuki Auto SA anyway), the keenly-priced Vitara Brezza (a B-segment crossover/SUV) is almost exactly the kind of product that South African new-vehicle buyers have an appetite for right now. The only question is: Will they buy the much-in-demand car from plucky Suzuki... or the market giant Toyota?

The Vitara Brezza is the top-selling SUV in India (with 38.8% of the entry-SUV market and 18.4% of all SUV sales).

A mutually-beneficial partnership

So how did Toyota acquire the right to start selling rebadged Suzukis? Well, Toyota was very keen to increase its market share in the lucrative Indian market, while Maruti Suzuki (the runaway market leader in that country), was eager to acquire TMC’s hybrid- and autonomous driving technologies, both of which are becoming increasingly important as the market evolves – even in the developing world.  

The companies, which decided to co-operate as long ago as 2016, signed an agreement for a capital alliance in August 2019 to establish and promote long-term cooperation; Toyota duly acquired a 4.94% stake in Suzuki, while the latter bought a 0.21% stake in the former.

This is a physical manifestation of what Suzuki is getting out of the deal; a hybrid RAV4 clone named the Across.

Toyota produces 2 hybrid vehicles for Suzuki, of which the first is the Across (or A-Cross), which is a petrol-electric RAV4 for the European market (it's built in Turkey) and the other is reported to be a Corolla Estate (produced in the UK). Suzuki, on the other hand, will supply Toyota with the aforementioned Baleno, Vitara Brezza, but also, some reports say, the Ciaz budget sedan and Ertiga small MPV – could the last two be heading for Mzansi in Toyota guise as well? Time will tell.

Badge-engineering has a chequered past

But wait, the thousands of ZA consumers who are deeply devoted to Toyota and everything it represents surely won’t be duped into buying products that are Toyotas in name only? Or will they?

For South African motorists of a certain vintage, badge-engineering or, for a more accurate (if somewhat less glib) description, “badge-interchangeability” is a huge turnoff. For the sake of brevity, badge-engineering is a (largely derogatory) term that was coined for the practice of manufacturers selling identical models under separate brands. In other words, they’re the same but wear different badges.

While Ford and Mazda were churning out badge-engineered models, the "wet-look" Corolla was selling up a storm.

So, let me take you back about 40 years or so, when Toyota still had a white horse in its emblem and adopted the “Everything keeps going right” slogan and sold many thousands of the Corolla compact sedan (and its Conquest hatchback variant) to become the country’s leading passenger vehicle manufacturer. Toyota ascended to the top of the pile at the cost of Ford, which admittedly dramatically reduced its role in Mzansi due to sanctions/disinvestment.

It was also in that era that Ford and General Motors adopted strategies to produce cars for specific regions (rather than global models, which are now the norm). In South Africa, the Blue Oval produced cars under the Samcor banner and duly slapped Ford and Mazda badges on cars interchangeably, such as the Laser/Tracer/Meteor, which were clones of the Mazda 323 hatchback/sedan; the Telstar and 626 were identical and so were the brands’ bakkies. 

Those products weren’t stellar (in terms of design, performance/efficiency – and especially build quality) and that product strategy hurt Ford especially. Sales slumped and even though the Blue Oval returned to SA officially after the dawn of democracy and the current (T6) Ranger became the country’s 2nd favourite bakkie, Ford never quite managed to recover its brand cachet in the local passenger-car market. And that’s that.

Why Toyota’s trying it now

You see, since those heady days of big hair, shoulder pads, synth-pop and pyramid schemes (oh, and lots of other dodgy things), Toyota has lost its lead in the passenger-vehicle market to Volkswagen. The Uitenhage-based firm kept the CitiGolf going (and going), launched the first of its Polo offerings in the late ‘90s (the Polo Vivo came later) and haven’t looked back since.

20Hatch 009
The Corolla Hatch is a handsome offering, but buyers aren't flocking to the compact market the way they used to.

If Toyota wants to wrestle back the market leadership from VW in Mzansi, it needs a stronger model line-up than what it has now. TMC is not renowned for building budget cars (which is Suzuki's forte) and while the Yaris, which arrived here in 2nd-generation guise in the mid-Noughties was nifty, subsequent versions were much less adorable – the current Thai-sourced model is, well, humdrum.

Moreover, the Corolla – statistically the bestselling car in the history of the automobile ­­– is not only rather pricey these days, but completely out of step with purchasing trends. Sales figures indicate consumers favour compact crossovers over sedans and hatchbacks. The year 2020 was a proverbial dumpster fire, of that there is no doubt, but Toyota sold fewer than 1 500 current-shape Corollas (4- and 5-door versions), which was a veritable disaster.

Granted, the Corolla Quest sedan sells well on the basis of its good value and fleet potential, but the brand lacks small SUVs (other than the boutique C-HR and the bargain-bin Rush – if that’s still on sale) to slot in below the RAV4 family car. That’s why the Urban Cruiser is such a godsend for Toyota SA; the newcomer should sell like hotcakes, because, if the Starlet’s performance is anything to go by, as long as a product is well-made and wears a Toyota badge – it will sell! Don't forget that the Toyota Avanza, for example, is a rebadged Daihatsu; it's certainly not Toyota's first re-badging exercise. 



The Indian-made S-Press is a popular entry-level offering; it is Suzuki Auto SA's 2nd-best seller.

Where does it leave Suzuki?

Look, such is Maruti Suzuki’s dominance in the Indian market (50% share at the end of 2020) that it can afford to relinquish some ground to Toyota (3%) on the subcontinent. Suzuki is currently producing the Starlet and the Urban Cruiser for Toyota at its own plants, although production of the latter will reportedly shift to TMC’s Karnataka plant at some point in 2022.

Therefore, Suzuki – and its component suppliers, no doubt – will be all too happy to produce more products (even if they don’t necessarily wear Suzuki badges), but what about Suzuki Auto SA’s position in all of this? Whereas its mother company is dominant in India, where Toyota is but a bit player, in the Republic, the situation is well and truly the opposite.

The Urban Cruiser is the model that Toyota's been waiting for; it's not as smart as the CH-R, but it has much wider appeal. 

Following a resurgent 2020, during which the multiple #CarsAwards – powered by WesBank category winner Suzuki Swift was the 15th-best-selling model in the entire South African market, Suzuki Auto SA registered its best-ever sales month in February 2021. The Swift compact hatchback, which won the Entry Level category of our 2020/21 awards programme, accounted for the lion’s share of those sales, while the Baleno – plus the Ciaz and Ertiga, if they happen to be assimilated by the mighty TMC in future – accounted for just over a hundred of the 2 142 units sold.   

Therefore, there is no need to fear for the future of Suzuki Auto SA – at least not yet. Although the firm won’t be too miffed about the market’s perennial underappreciation of the Baleno, perhaps it could have sold many hundreds more of the Vitara Brezza had the pesky Toyota Urban Cruiser not come along… But the firm will sell quite a few of them anyway.

If the model-sharing agreement between the Japanese firms remains unchanged, Toyota SA will benefit the most from it because the models it has acquired neatly plug a couple of gaps in the firm’s local product line-up. Should TMC decide in future that it also likes the look of the S-Presso, Swift and Jimny, however, the picture could change drastically for Suzuki SA.

Related content:

China's stealthy progress – what it bodes for SA

The end of empire for VW

It's okay to desire a 4-cylinder BMW

GWM P Series could be the perfect Chinese bakkie

VW's Accelerate Plan: Golf, Tiguan to live on