And so it begins. Giant Toyota and wee Mazda announced a collaborative agreement this week that will benefit both companies. The agreement allows each automaker to leverage products and technologies from the other, a partnership that does not include Toyota taking a financial stake in its much smaller competitor.
What the agreement effectively does is to expand an earlier arrangement whereby Mazda is supplying Toyota with a small car based on its Mazda 2 subcompact platform. That vehicle, the 2016 Scion iA, debuts this fall. In exchange, Mazda can now tap Toyota’s plug-in hybrid electric vehicle technology.
Symbiotic Task Force
The two companies will establish a joint committee to determine how each automaker can make use of the other’s chief assets. The collaboration will be broad and involve a number of disciplines, including various environmental initiatives and advanced safety technologies.
Toyota President Akio Toyoda and Mazda, President and CEO Masamichi Kogai, held a news conference in Tokyo on Wednesday to announce the accord.
Toyoda pointed to two strong Mazda initiatives that have helped this small car manufacturer succeed in an ultra-competitive global market: its SKYACTIV Technologies and KODO―Soul of Motion design. Both present an enticing edge that Toyota does not have and can most certainly benefit from moving forward.
Said Toyoda, “Mazda has proven that it always thinks of what is coming next for vehicles and technology, while still managing to stay true to its basic carmaking roots. In this way, Mazda very much practices what Toyota holds dear: making ever-better cars.”
Toyota Saves the Day
Not mentioned by Toyota’s president is that the provision essentially seals Mazda’s fate. Certainly, ever since the Ford Motor Company severed its three-decade relationship with one of Japan’s smaller automakers, the company has lacked the financial resources, especially the economies of scale, it once had.
For example, the earliest Ford Escape and Mazda Tribute models shared the same bones. Although the Tribute’s replacement, the CX-5, is a superior model, the cash outlay for the compact crossover utility vehicle has been enormous.
Quite frankly, Mazda working alone does not have the resources to keep pace with the big guys. But Mazda and Toyota working cooperatively essentially provides the former with a savior. You can now scratch Mazda off your list of vulnerable automakers.
Speaking on behalf of Mazda, Kogoi said, “Toyota is a company that has shown steadfast resolve in acting responsibly on global environmental issues and the future of manufacturing as a whole. I also have tremendous respect for Toyota’s dedication in its pursuit of ever-better cars through ongoing innovation.”
Hydrogen and Hybrid Technologies
No doubt, Toyota and its 10.2 million per year car building efforts will energize Mazda and its 1.2 million annual output. The two companies are competitors, but the move will enable each one to plug specific product holes.
For Mazda, the company will gain access to Toyota’s hydrogen vehicle technologies and expand its PHEV offerings. It isn’t quite clear how this arrangement will work, but look for a PHEV Mazda CX-5 or Mazda 6 in the future. Most likely both. Rebadging the hydrogen Toyota Mirai as a Mazda doesn’t seem likely, although that chassis might someday power a future Mazda product.
Toyota gains access to Mazda’s SKYACTIV technologies, represented by fuel-efficient gasoline and diesel engines, advanced transmissions and lightweight bodies. Of special interest could be Mazda’s diesel engines, one of the weakest areas for Toyota.
Toyota does have diesel technology, but readying those engines for the American market would be a costly undertaking. Mazda has a twin-turbo 2.2-liter diesel engine in the wings, one that meets both European and US emissions standards. The engine is suitable for the midsize Mazda 6 sedan and might also be made available with the Toyota Camry.
As for the Camry, not everyone wants a hybrid and the Mazda diesel would give Toyota something that does not involve vehicle electrification. And if certain KODO design elements transfer to the Camry and other Toyota models, the world’s largest automaker may suddenly gain a much-need styling edge.
Collaboration Gauntlet Thrown Down
The Toyota-Mazda arrangement may prove to be the most comprehensive one amongst automotive manufacturers yet. Beyond outright mergers, acquisitions and stake holding, most relationships today are based on special projects involving complex technologies.
For example, Honda and General Motors are collaborating on hydrogen technology. Mitsubishi and Nissan are working on supplying the former with a midsize sedan for the US market. Daimler, Ford and Renault-Nissan are working on fuel-cell technologies with the first models expected to arrive in 2017. Every manufacturer is working with someone else to share technologies and to mitigate costs.
And beating the drum for ever broadening industry cooperation has been none other than Fiat Chrysler Automobiles (FCA) CEO, Sergio Marchionne. Just this week Marchionne met with Tesla and Apple CEOs, raising speculation that a Silicon Valley partnership may be in the offing. Marchionne has made it known that FCA is looking for a suitor. He has also stated that the global market can only support six major players.
In any case, the Toyota-Mazda joint effort will likely encourage other automakers to boost their efforts. Importantly, the timing for Mazda couldn’t be better as the next economic turn down is approaching, what most certainly will shake out some of the weaker players.