TOKYO -- When white-haired Osamu Suzuki approached fellow industry patriarch Shoi-chiro Toyoda to sound out a partnership, it was a sign of the changing times rattling both their companies.
Within mere weeks of that surreptitious meeting, Toyota Motor Corp. and Suzuki Motor Corp. called a snap press conference last week to announce talks to explore business tie-ups.
Never mind that neither side could float any concrete ideas.
For Suzuki, a company so tightfisted it wouldn't pay for proper fuel economy test facilities, it was the latest attempt to shelter with a friendly, deep-pocketed giant, after a largely fruitful alliance with General Motors and then a spectacular boondoggle with Volkswagen AG.
And for Toyota, a company brimming with cash but cautious of deep cross-ties, it was an opportunity to bring a rival under its sphere of influence. Pairing with Suzuki might give it better access to the rapidly growing auto market in India, where small Suzuki is strong and big Toyota is weak.
With Suzuki under its wing, Toyota and its affiliated carmakers and truckmakers -- including Subaru, Mazda, Daihatsu, Hino and Isuzu -- would account for a whopping 65 percent of the Japan market, reckons Kurt Sanger, chief auto analyst at Deutsche Securities Japan.
"Toyota is locking in their circle of influence," he said.
In announcing the proposal last week, the companies cited a business environment that is "changing drastically and rapidly in an unprecedented fashion." Spiraling costs to develop next-generation drivetrains, autonomous-driving systems and new information technology are spurring such erstwhile rivals to consolidate, cooperate and share the ever-increasing burden.
Even CEO Akio Toyoda, whose company plans to spend more than seven times as much as Suzuki on r&d in the current fiscal year, acknowledged there is a limit to how much development one company can do. "We have to be mindful of management resources," he said.
Suzuki knows this better than anyone. It had teamed with Volkswagen, largely to get access to the advanced electrified drivetrain technology it needs to meet increasingly stringent emissions standards. Its low-cost vehicles also tend to lag in advanced safety systems.
Suzuki's weaknesses took center stage this year when Japanese regulators rapped it for faulty fuel economy testing. Suzuki admitted combining individual component tests to estimate a fuel economy figure rather than conducting a coasting test of the whole vehicle.
It did this, Suzuki said, because its Sagara proving ground is on a windy hilltop and the company didn't have an indoor facility where it could test, regardless of the weather conditions.
Osamu Suzuki, 86, resigned his post as CEO to take responsibility for the flap, though he remains chairman. It wasn't long before he was calling on Shoichiro Toyoda, 91, who is honorary chairman of Toyota, a former president of the company and the father of its current CEO. Shoichiro referred him to Akio, who agreed to explore possibilities.
The episode underscores the sway still wielded by the elder chairmen at two carmakers that are nominally publicly traded but still largely family-run. While the chairmanship usually is regarded as a figurehead post in Japan, Shoichiro still has an office at the company's Toyota City headquarters and reports regularly to work. Osamu has handed control of his namesake company to his son Toshihiro Suzuki, the current president, CEO and COO.
The choice of venue for the announcement -- the auditorium at Toyota's Tokyo office -- hinted at who might be in the driver's seat. Traditionally in Japan, a neutral, third-party location would be chosen for such a partnership. At the news conference, the Toyota chief sidestepped questions of a capital tie-up between the companies.
"I have no ideas right now," he said. "Everything starts from here."
Naoto Okamura contributed to this report.