NAGOYA – Toyota Motor Corp. and Suzuki Motor Corp. are considering a wide-ranging partnership to meet growing demand for compact cars in emerging markets such as India, sources said Wednesday.

The tie-up would focus on safe driving technology and eco-friendly cars, the sources said, adding that the companies may consider cross-shareholdings.

Such a partnership could have broad implications for the car industry at a time when Japanese automakers have enjoyed strong sales overseas but sales at home have stalled.

The tie-up would help Toyota boost its market share in India, while Suzuki can seek assistance from the top automaker in next-generation technology.

Last year, Toyota and Mazda Motor Corp. agreed to begin joint development of technology with an environmental and safety focus.

Toyota and Suzuki on Wednesday were downplaying the possibility of a tie-up. In separate statements, they said they were not discussing a potential partnership.

In a separate move, Toyota is considering turning Daihatsu Motor Co. into a wholly-owned subsidiary. The Toyota, Aichi Prefecture-based automaker has a roughly 51 percent stake in Daihatsu.

Last year, Toyota agreed with Mazda Motor Corp. to cooperate in developing environmentally friendly and safe-driving technology.

With global sales of over 10 million vehicles, Toyota has played a major role in the emerging driverless technology sector.

Its lineup of eco-friendly cars includes the Mirai, the world’s first commercially available hydrogen vehicle, and the fuel-efficient Prius hybrid, the latest model of which purports to run 40.8 kilometers on a liter of gasoline.

Suzuki is known for low-cost compact cars and has strength in emerging markets. It first entered the Indian market in the 1980s and now holds at least 40 percent of the market share for passenger cars in India.

The Hamamatsu, Shizuoka Prefecture-based company formed a capital and business alliance with Germany’s Volkswagen in 2009. The two companies dissolved it in 2015 when they failed to bridge differences over their management styles.

Suzuki went to the International Court of Arbitration of the International Chamber of Commerce in November 2011 after Volkswagen refused to terminate the partnership and vowed to retain its stake in Suzuki.

Meanwhile, industry figures showed Wednesday that Toyota remains the world’s biggest automaker with global sales of 10.15 million vehicles last year, outpacing rivals Volkswagen and U.S.-based General Motors.

Struggling to move past a pollution-cheating scandal, Volkswagen earlier said it logged sales of 9.93 million vehicles worldwide in 2015, while Chevrolet and Cadillac maker GM moved 9.8 million.

In the first half of the year, Volkswagen was in pole position, outpacing Toyota as the German automaker rode momentum in emerging economies. It then posted its first drop in annual sales in more than a decade amid an emissions-test dodging scandal.

Revelations in September that Volkswagen had fitted 11 million vehicles with devices to dodge emissions tests plunged the carmaker into crisis.

Toyota broke GM’s decades-long reign as the world’s top automaker in 2008 but lost the crown three years later when the Great East Japan Earthquake and tsunami dented production and disrupted Japanese supply chains.

However, in 2012 Toyota once again overtook its Detroit-based rival and has remained ahead since.

http://www.japantimes.co.jp/news/2016/01/27/business/toyota-suzuki-consider-partnership-steered-toward-emerging-markets/#.VqkD16hFMSY