Toyota and Subaru Hybrid Car Partnership?

The newspaper ‘Nihon Keizai Shimbun’ reports that Toyota Motors and Subaru-maker Fuji Heavy Industries may cooperate to form a technology-sharing partnership in hybrid electric-gasoline vehicles. This could establish Toyota's system as the standard for the fuel-saving technology.

A spokesman at Fuji Heavy Industries said they had not entered formal talks with Japan's top auto maker, but there was a "very high chance" that Toyota's hybrid system would be the best match for its vehicles. Toyota President Fujio Cho and Fuji Heavy President Kyoji Takenaka are expected to hold talks soon on the matter, which had been discussed on a working level since last year.

Toyota, which has so far agreed a licensing deal with rival Nissan Motor to supply its hybrid system, has said it would welcome similar deals with other auto makers because higher production volumes would help it reduce per-unit costs.

Toyota accounts for the majority of hybrid vehicles sold in the world now, and also licenses part of its technology to Ford Motor. Toyota, whose Prius gasoline-electric sedan has been leading the global hybrid market since it first appeared in 1997, has targeted sales of 300,000 hybrid vehicles a year by mid-decade.

A deal between the two Japanese companies would ensure Toyota's dominance in the field because Subaru would be choosing its technology over a less efficient hybrid system developed by General Motors, its biggest shareholder.

GM said in December it would develop a new hybrid technology with DaimlerChrysler AG to catch up with leaders Toyota and Honda Motor, but the technology is best suited for bigger vehicles.

Fuji Heavy, held one-fifth by GM, would use the power system in its Legacy and other models sold in the United States, where it generates 35 per cent of its sales. In return, Fuji Heavy would supply Toyota with advanced lithium ion batteries for use in hybrids.

Hybrid vehicles twin a combustion engine with an electric motor and battery in which the act of braking captures lost energy, enabling it to save fuel and emit fewer pollutants.

The fuel-sipping vehicles have been gaining popularity, especially in the United States, with 88,000 of them sold in 2004 through just three brands -- Toyota, Honda and Ford.

Hybrids run on either its gasoline engine or on its electric motor depending on driving conditions, making them much more economical and environmentally-friendly than conventional gasoline engines.
These negotiations have yet to be confirmed by either company.

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