Toyota Motor Corp. and Suzuki Motor Corp. announced plans to produce electric vehicles (EVs) and compact cars for each other to better compete with fast-changing technologies in the global auto industry.

The agreement builds on a partnership between the two Japanese companies announced on 6 February 2017, under which Toyota is helping Suzuki to develop and market electric cars in India, while Suzuki helps Toyota increase its presence in the fast-growing Indian market.

Under the latest agreement, Suzuki will source hybrid systems for cars it sells worldwide from Toyota, which pioneered hybrid vehicles with the Prius more than 20 years ago.

“When it comes to vehicle electrification, which is expected to make further inroads, hybrid technologies are seen as playing a huge role in many markets, as from before. Widespread acceptance is necessary for electrified vehicles to be able to contribute to Earth’s environment. Through our new agreement, we look forward to the wider use of hybrid technologies, not only in India and Europe, but around the world,” said Toyota President Akio Toyoda.

“At the same time, we believe that the expansion of our business partnership with Suzuki―from the mutual supply of vehicles and powertrains to the domains of development and production―will help give us the competitive edge we will need to survive this once-in-a-century period of profound transformation. We intend to strengthen the competitiveness of both our companies by applying our strong points and learning from each other,” he added.

Suzuki’s hybrid vehicles for the Indian market will be made using engines and batteries locally produced by Toyota. In addition, Toyota will produce electric vehicles based on its RAV4 SUV crossover and Corolla wagon for Suzuki in the European market.

In return, Suzuki will produce two compact models for Toyota in India based on its Ciaz and Ertiga models, and supply Toyota with gasoline engines for compact vehicle models sold in Europe.

Suzuki will also produce its Baleno, Vitara Brezza, Ciaz, and Ertiga models for Toyota to sell in Africa.

Suzuki Chairman Osamu Suzuki said: “At the time we announced our scope of cooperation in May last year, I spoke that we will strive for success globally. I have seen progress in the partnership since then, and it is my pleasure to be able to make this announcement today regarding the status of partnership on a global basis, including Europe and Africa. In addition, we appreciate the kind offer from Toyota to let us make use of their hybrid technology. We will continue our utmost efforts.”