Suzuki takes SUV battle to Hyundai

Suzuki Motor Corp. is developing a mid-size sport-utility vehicle (SUV) for India, aiming to mount a bigger challenge to South Korea’s Hyundai Motor Group, which dominates this fast-growing segment, said three people directly aware of the matter.

The new vehicle, code-named ‘YFG’, is based on Suzuki’s popular global SUV brand, Grand Vitara, the people said, requesting anonymity.

Production of the vehicle is likely to begin from 2022 at the factory of Toyota Motor Corp.’s Indian unit in Karnataka, becoming the first Suzuki product to be produced by Toyota in India as part of a wide-ranging partnership between the two Japanese automakers.

The new SUV would be sold under both Suzuki and Toyota brand names, the people said. It is likely to come equipped with a strong gasoline hybrid powertrain to help both companies qualify for the stricter second phase of corporate average fuel efficiency norms, they added.

Suzuki’s move to bring a Grand Vitara-based SUV to India is to fill the gap in the mid-size SUV segment where Hyundai and Kia have taken a commanding lead with products such as the Creta and Seltos, one of the three people cited above said.

Suzuki’s unit, Maruti Suzuki India Ltd, sells the S-Cross crossover but it has still to gain strong customer acceptance.

“Suzuki will need to dominate the SUV segment in India to maximize profits of its India subsidiary, and the SUV segment is key to that success. The new vehicles will be shared by both Suzuki and Toyota, and this will give them the scale as well. Though Suzuki has managed to hold its overall market share, the same in the SUV segment has declined substantially,” the person said, requesting anonymity.

Spokespersons for Maruti Suzuki did not respond to queries emailed on Wednesday. A spokesperson for Toyota’s unit, Toyota Kirloskar Motor, declined to comment.

Maruti Suzuki is the largest carmaker in India, thanks to its wide range of affordable, fuel-efficient small cars.

Hyundai, however, dominates the SUV segment with its compact and mid-size SUVs sold under the Hyundai and Kia brands.