Japan's Suzuki Motor will supply compact vehicles to Mitsubishi Motors in their domestic market, the two firms said Friday, as automakers explore ways to survive in a shrinking market. Suzuki will offer 800 Solio vehicles to Mitsubishi Motors a month, under an original equipment manufacturer (OEM) deal, they said in a joint statement.
"The OEM supply is expected to generate new customers" for Mitsubishi by strengthening its product lineup, the statement said. With the deal, "Suzuki aims to improve its productivity and lower production and development costs through further increasing economies of scale", it said. Compact vehicles have gained popularity in Japan because of their fuel efficiency and small size allowing easy driving through narrow Japanese roads.
The Suzuki-Mitsubishi deal is the latest in a series of tie-ups and alliances among major Japanese automakers as they struggle to stay profitable in a slumping domestic market with a falling population. Earlier this month, Mitsubishi and Nissan Motor announced an expanded partnership agreement, with a special focus on co-operation on mini-vehicles in Japan and compact automobiles in the global market.
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