The world’s largest automaker announced this week it will enter into a partnership with one of its biggest global competitors. While the deal may seem surprising, it follows a historical precedent, industry analysts assert.Japan-based Toyota Motor Corp., the world’s biggest automaker, said this week it will work with Detroit-based Ford Motor to develop gasoline-electric trucks and sport utility vehicles (SUVs). The vehicles will be ready for market by the end of the decade, according to a report from Reuters, and engineers from the two companies will work to develop superior telephone, internet and entertainment systems, Toyota officials affirm.
This is not the first time Toyota has worked with an ostensible competitor, according to a report from NPR. Toyota formed a collaborative partnership with General Motors in the mid-1980s, as the two businesses shared trade secrets in a bid to improve efficiency at GM's ailing Fremont, California, production facility.
The earlier partnership between GM and Toyota was exceedingly successful, and it ultimately resulted in improved performance at the U.S. automaker’s manufacturing facility. Toyota shared its production secrets with GM through the joint venture, and took over the Fremont manufacturing facility, implementing a number of its vaunted management techniques in the process.
The Fremont facility, under Toyota’s influence, underwent a series of improvements, and the overall quality of the cars assembled drastically improved. What’s more, the quality improvements were also met with business cost reductions, as Toyota executives implemented strategic sourcing initiatives and manufacturing efficiency improvements, bolstering the factory’s output.
Toyota officials are hoping the new partnership with Ford will help the company to jumpstart manufacturing, which has suffered in the wake of March’s natural disasters. The supply chains and production faculties of Toyota, along with Honda, Nissan and other Japan-based automakers, were significantly damaged after the 9.0-magnitude earthquake and tsunami battered Japan, walloping the country’s northeast coast, where many carmakers’ manufacturing facilities are located.
Officials from Toyota and Ford said on Monday their engineers will collaborate on product development for the future rear-wheel drive hybrid cars, Reuters reports. They will further work together as the companies endeavor to meet stringent fuel efficiency regulations trumpeted by the Obama Administration and recently signed into law.
The regulations mandate the fleet of new cars and trucks will have to average 56.5 miles per gallon by 2025, a significant jump from the current Environmental Protection Agency laws, The Associated Press reports.
The companies said their plans are limited to collaborating on rear-wheel drive hybrids, on-board phone, navigation and entertainment systems.
Toyota is renowned for its management system, which, among other tenets, permits employees to operate autonomously. Toyota has been the global leader in the development of hybrid vehicles since 1997, the year it introduced the now ubiquitous Prius, and has sold more than 3.3 million hybrids since then, according to the news provider.
Ford, on the other hand, has long been a market leader in the full-size truck sector, where its F-series pickup trucks have long dominated models from competitors – including Toyota. The F-series, for example, has been the best-selling vehicle line-up since the 1970s.
Still, the two companies are still working out the final terms of their newly announced agreement, and officials affirmed further details will be released “sometime in 2012.”
Industry analysts largely praised the move, noting the improved collaboration will benefit consumers as manufacturing cost reductions are achieved, resulting in lower retail prices.
"Trucks and SUVs are indispensable for the U.S. society. We have a lot of details to work out with Ford before we can talk about our cooperation with Ford" Toyota vice president Takeshi Uchiyamada said in a statement.
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