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Suzuki Motor Corp. said it’s exploring collaboration with Toyota Motor Corp. amid unprecedented costs to make cars safer and cleaner, one year after the smaller Japanese automaker extricated itself from a failed partnership with Volkswagen AG.

Toyota and Suzuki just began examining opportunities to collaborate on research and development, the companies said in a joint statement. Suzuki stands to gain more from a partnership limited to R&D. Its Toyota City, Japan-based peer has budgeted 1.07 trillion yen ($10.3 billion) this fiscal year, more than seven times Suzuki’s planned spending.
“Smaller and medium sized carmakers are finding it hard to compete in the mid- to long-term not only in powertrain technologies but also in technologies for autonomous driving,” said Yoshiaki Kawano, an auto analyst at IHS Markit. “This is not a short-sighted strategy” and smaller companies like Suzuki “are forming relations with bigger companies with their future in mind.”