Ford And Toyota To Collaborate On Hybrid Trucks

By Bill Visnic August 22, 2011

Ford Toyota Hybrid Collab.jpg

Ford Motor Co. and Toyota Motor Corp. announced today the two companies signed a memorandum of understanding to jointly develop a hybrid-electric powertrain earmarked specifically for rear-wheel-drive light pickup trucks and SUVs. Although specifics remain sketchy, Derrick Kuzak, Ford group vice president of global product development, said in a press conference to announce the collaboration today that the two companies are aiming for vehicles using the new hybrid propulsion to be on the road “sometime later this decade.” The new agreement also includes provision for the two companies to collaborate on the architecture and standards for next-generation telematics systems.

The collaboration between two current leaders in hybrid sales – Toyota by far is the world’s hybrid sales leader, however – to co-develop hybrid technology for pickups and SUVs appears directed at two crucial factors of concern as automakers face impending new U.S. fuel-economy regulations: making the cost of new fuel-efficiency advances affordable and finding a way to keep pickups relevant to personal-use buyers, who have been vacating the segment in the face of high fuel prices and increasing concern about the environmental impact of high-consumption vehicles.

Takeshi Uchiyamada, Toyota executive vice president of research and development, stressed the two companies’ desire to keep pickups and SUVs affordable and attainable for U.S. customers as the new fuel-efficiency standards virtually demand a technical breakthrough to advance these vehicles beyond their current fuel-consumption paradigm. That breakthrough, Uchiyamada and Kuzak stressed, must be affordable – one of the primary reasons Ford and Toyota determined it was best to collaborate on development, the executives said.

“[Environmental Protection Agency] fuel standards are a big challenge for us,” Uchiyamada said today, if Ford and Toyota are to continue to sell the trucks and SUVs “American society cannot do without.” He called pickups and SUVs “indispensible to American customers,” and Ford’s Kuzak said the collaboration between the two companies, “brings together the capability of two global leaders in hybrid vehicles and hybrid technology to develop a better solution more quickly and affordably for our customers.”

Kuzak said the first phase of the MOU encompasses a feasibility study. Then a “definitive” collaborative research-and-development agreement will follow. Engineering work will be done globally, but the two companies will decide later how and where to co-locate the development teams. Considering pickups and rear-drive truck architectures largely are U.S.-oriented products, however, it’s likely much of the engineering work will be located in the U.S., although the electronics and battery development efforts specific to hybrid components conceivably could be centered elsewhere. Some will remember that much of Ford's first-generation "full" hybrid system, deployed in the Escape Hybrid, was comprised of components licensed from Toyota.

Importantly, the companies seemed to stress that collaboration on the new hybrid system in no way is intended to lead to any form of future platform sharing. The collaboration will “provide not platforms, not vehicles, but enabling technologies,” Kuzak said. A Ford press release also elaborated: “While the rear-wheel-drive hybrid system will share significant common technology and components, Ford and Toyota will individually integrate the system into their own vehicles. Each company also will determine the calibration and performance dynamics characteristics of their respective light pickups and SUVs.

082211 Silverado Hybrid - AO.jpgRisk And Reward
For Ford, at least, it would seem the new agreement with Toyota is aimed almost entirely at ensuring the high-volume, best-selling F-150 pickup remains relevant, available and attainable as fuel-economy mandates ratchet up in the coming years. The collaboration to develop hybrid systems for such vehicles brings together Toyota, the company that developed and defined affordable mass-market hybridization and Ford, a company with vast success in selling high volumes of pickups. 

According the industry and pricing analyst Ivan Drury, in 2010, Toyota held a commanding 69.4 percent of the total hybrid market in the U.S. and Ford kicked in with a 13-percent share, meaning the two companies accounted for more than four out of every five hybrid vehicles sold in the U.S. In raw numbers, that amounted to 189,167 total hybrid sales for Toyota in 2010 and 35,496 for Ford.

And it is all about the F-Series pickup for Ford, as the company - at least for now - largely has turned away from rear-drive, truck-based architectures of the traditional SUV ilk. The company's only remaining truck-based SUV is the low-volume Expedition, but hybridization could be the innovation to help return body-on-frame SUVs to market acceptance.

For Toyota, by beginning work now on affordable hybrid pickups, the company is developing a potential marketing advantage for its Tundra fullsize pickup, which while earning a limited success in the fullsize pickup segment long dominated by domestic nameplates, has yet to achieve the kind of showroom success to genuinely challenge the domestics. Presuming that the collaboration with Ford gives Toyota a head start over General Motors Co. and the Chrysler Group LLC’s Ram division, having a hybrid Tundra in showrooms is a new weapon in Toyota’s competitive arsenal.

But GM, at least, has been down the hybrid pickup path, with scant success. Its hybrid Chevrolet Silverado Hybrid and GMC Sierra Hybrid, though offering significant fuel-economy improvement compared with their conventional counterparts, are prohibitively expensive (the 2012 Silverado Hybrid MSRP begins at $39,265) and thus have almost invisible to the everyday pickup buyer. The rear-drive-based GM vehicles that employ the same “2-mode” hybrid system as the Silverado and Sierra hybrids also are expensive and have sold in extremely low volumes - since their introduction in early 2009, hybrid models have accounted for about one-half of one percent of all Silverado sales. Interestingly, BMW AG, Daimler AG's Mercedes-Benz and Chrysler collaborated with GM on the development of the 2-mode hybrid system in a fashion seemingly similar to the agreement Toyota and Ford now are crafting, yet none of the collaborators achieved commercial success with their fullsize hybrid models.

Nonetheless, today’s announcement from Ford and Toyota is certain to send shockwaves in the headquarters of the two companies’ competitors. Chrysler and GM will be under pressure to respond. Toyota’s chief Japanese rivals, Honda Motor Co. Ltd. and Nissan Motor Co. Ltd., are less reliant on fullsize, rear-drive vehicles and are less impacted. But neither Honda nor Nissan have achieved Toyota’s level of prominence as an expert in hybridization and the new venture with Ford is likely to further increase Toyota’s reputation as a hybrid-development leader.

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