Tokyo: Toyota Motor Corp plans to supply core components for hybrid vehicles to smaller rival Mazda Motor Corp, the Nikkei business daily reported, as the popularity of gasoline-electric cars surges in Japan thanks to tax incentives.
The report sent Mazda’s shares soaring 8.9%, with such a move marking a shift in strategy for the Hiroshima-based automaker, which repeated on Thursday it still aimed to raise fuel economy with improvements to internal combustion engines until 2015.
The Nikkei said the components will be used in a hybrid vehicle Mazda is planning to launch as early as 2013, with a sales target of some 100,000 units a year.
Mazda approached Toyota with the request, and an announcement on the alliance is expected soon, it added.
Toyota and Mazda declined to comment on whether they were holding such talks, denying a decision had been made.
Toyota’s shares rose 2.9%, mirroring a rise in other auto stocks and the broader Tokyo market.
Toyota, a pioneer in hybrid technology with at least a 10-year lead on most rivals, currently supplies its hybrid system to Nissan Motor Co, which uses it in its Altima hybrid sedan for the US market, although those sales are negligible.
With the launch of two relatively low-cost hybrid cars this year — Toyota’s third-generation Prius and Honda Motor Co’s Insight — analysts have said the bar for developing competitive gasoline-electric cars has risen.
That has raised the possibility that rivals would seek supply deals from the front-runners or through other forms of collaboration, analysts say.
“Technology that meets environmental regulations comes in a variety of flavours, and we suspect that very few automakers have the wherewithal to develop all of them,” JPMorgan analyst Kohei Takahashi wrote in a note to clients.
“Given this, we expect an increasing number of automakers to employ Toyota’s series/parallel (hybrid) technology for its proven low costs and high reliability, with Toyota suppliers selling them the core components.”
The Nikkei said that under the deal, Toyota would supply batteries, motors, control units, and other components made by group parts makers to Mazda, boosting economies of scale and revenue. Denso Corp and Aisin Seiki Co are among Toyota’s key hybrid suppliers.
Mazda, affiliated with Ford Motor, has said it is considering various options for hybrid technology, including outsourcing its development instead of developing it on its own or with Ford.
Mazda has one hybrid model, the Tribute SUV, which is produced by Ford using technology partially licensed from Toyota. The model is only sold in California.
Mazda’s research and development chief Seita Kanai said earlier this year that Mazda expected to start mounting electric devices such as motors for hybrids from 2015 at the earliest.
But the pressure to offer hybrid models has grown in Japan as consumers flock to gasoline-electric vehicles, which receive the biggest tax breaks under a government initiative that started in April to spur sales of cleaner cars.