Suzuki Motor Corp. and Kawasaki Heavy Industries Ltd. announced Wednesday they will tie up in the development and production of motorcycles and all-terrain vehicles to increase profits amid intensifying global competition.
It will be the first business alliance between domestic motorcycle makers.
Suzuki, ranked third in the domestic motorcycle business with a market share of 14.8 percent, and Kawasaki, ranked fourth with a share of 2.5 percent, will mutually supply the vehicles on an original equipment manufacturer basis, they said.
They will also use common components and jointly procure them to reduce costs.
They will begin the tieup with larger models such as American-style motorcycles, large scooters, motocross bikes and ATVs, they said.
The alliance will cover some 60 percent of the entire production units for Suzuki and 40 percent for Kawasaki.
The products will be marketed as separate brands and distributed through their separate distribution networks, they said.
Suzuki Chairman Osamu Suzuki told a news conference the domestic motorcycle market has shrunk to a level less than 25 percent of its peak.
"Given the current economic slump, odds are small that the market will grow greatly," he said.
Total motorcycle sales in Japan have fallen from 3.29 million units in 1982 to 770,000 last year.
Kawasaki President Masamoto Tazaki told the same news conference that the tieup with Suzuki is a strategic alliance that will make motorcycles a core business for his company.
The two companies, however, remain far behind industry leader Honda Motor Co. and No. 2 maker Yamaha Motor Co. in the motorcycle market.