Ford and Toyota, Hybrids and Telematics

What took them so long?

What took them so long?

Seriously. The announcement by Ford and Toyota today regarding their signing a memorandum of understanding (MOU) for product development collaboration in two specific areas is something that should come as little surprise to anyone who thinks about the competitive landscape in the auto industry right now.

Companies need to leverage capabilities and resources wherever and whenever they can. And in this particular case, it makes good sense—business and otherwise—for Ford and Toyota to work together.

A cultural argument can be made that the two companies are extremely similar. They were both founded by individuals who actually worked on building their respective companies—Henry Ford and Kiichiro Toyoda. Family members—as in Bill Ford, Jr., and Akio Toyoda—are still involved in the companies.

Both are full-line manufacturers that are driven largely by solid engineering and a focus on value for money.

So the alignment is arguably unparalleled by any two other companies in the business.

They are working together on two things, where both companies are good, but one is better:

· Hybrid technology. Toyota gets the nod here, with its extensive development of what is now known as the “Hybrid Synergy Drive.” The name “Prius” is synonymous with hybrid like no other car.

· Telematics. Here it goes to Ford. Let’s face it, the Ford SYNC system is not only well known, but it is truly best-in-class.

In the cases of both of these technologies, both companies are doing good work, so it is not like one is getting a pass for one thing or the other.

The slight surprise is that the hybrid that is being developed is for light trucks and SUVs, and let’s face it, in the light truck market Ford is certainly the stronger player, so if there is any surprise it is that it is doing a collaboration in this space. Still, there is nothing like pragmatism, so while the F-Series may eclipse the Tundra in the market, the team at Ford knows that having hybrid technology for vehicles in that rear-drive category will be key in order to meet forthcoming EPA regulations. Who better to work with on hybrids than Toyota?

And it should be noted that Toyota is just now rolling out with its Entune telematics system, so it is not like it is not bringing anything to the collaboration in F     this space.

The term “co-opetition” has dropped out of common business parlance since the book of that title was published in 1996. T

The Ford and Toyota collaboration are a perfect example for the auto industry early on in the 21st century.