Ford and Toyota to develop a hybrid truck system together

Aug 22, 2011

Ford Motor Company sprang a surprise on the media world on Monday by announcing it had signed a memorandum of understanding with Toyota to jointly develop a rear-wheel drive hybrid system for SUVs and trucks.

Ford is the undisputed king of the pickup in the U.S.  Its F-series pickup has been the best-selling vehicle in the U.S. for 25 years.

Toyota is the undisputed king of the hybrid - the Prius is the best-selling hybrid in the U.S.

The two companies will also collaborate on wi-fi and Bluetooth technology, which enables many of the new communication products available in vehicles.

Derrick Kuzak is Ford's head of Global Product Development.  He made the announcement alongside Takeshi Uchiyamada, Toyota's executive vice president for research and development.

"Clearly Ford and Toyota will remain competitors," said Kuzak, "but at the same time by working together, and sharing our product development expertise, cost and leveraging our scale, we’ll be able to offer our customers even more affordable technology sooner."

The two declined to name any particular vehicles for the hybrid truck powertrain.  Details of the agreement remain to be worked out.

Ford probably has more to gain than lose from the collaboration, notes Michael Omotoso of J.D. Power and Associates.

"I don’t think they’re worried that if they share hybrid technology with the Toyota that the Tundra will all of a sudden overtake the F-series," says Omotoso.  "I don’t think they need to worry about that."

Trucks and SUVs face the challenge of meeting new federal fuel efficiency requirements in the U.S., but "trucks and SUVS are indispensable to the American lifestyle," noted Toyota's Takeshi Uchiyamada.

Another good reason for the two companies to collaborate on a hybrid truck?  Staying competitive with GM, which already has hybrid SUVS and trucks, including the Yukon, Tahoe, and Escalade, and the Sierra and Chevy Silverado pickups.

Omotoso notes those hybrid GM trucks and SUVS are not big sellers, mainly because they're much more expensive than the non-hybrid versions -- and they're far more expensive.

Ford's Kuzak says the company hopes to develop a hybrid truck that doesn't sacrifice affordability, towing capacity or payload capacity.

The cost-saving aspect of the collaboration is also a key element for both Toyota and Ford.  Toyota has lost billions related to last year's damaging gas pedal-related recalls, and this spring's devasting earthquakes and tsunami in Japan.

Ford Motor Company continues to work to reduce its sizeable debt load.  Ford owes about $13 billion, compared to General Motors' $5 billion.

The collaboration between the two companies began after a chance meeting between Ford CEO Alan Mulally and Toyota CEO Akio Toyoda at an airport.