Toyota May License Hybrid Technology to Subaru February 2005

Subaru Would Join Nissan as Toyota Hybrid Buyer

"If you can't beat 'em, join 'em," seems a fitting expression when referring to Toyota's dominance in the combustion-electric

While Toyota is still the leader in the field, more and more automakers are entering the gasoline-electric hybrid segment. (Photo: Trevor Hofmann, Canadian Auto Press)

hybrid war currently being played out by the world's foremost automakers.

While Honda continues to be Toyota's most capable rival, despite its use of mild-hybrid technology which is considered less advanced compared to the full hybrid systems offered by Toyota and now Ford, more and more automakers are entering the hybrid gasoline-electric segment.

DaimlerChrysler and General Motors recently announced a cooperative deal to develop and manufacture a proprietary hybrid system the two automakers will share in upcoming models, but being late to the game both companies have given much of the market to Honda and Toyota. GM recently entered the fray with its mild-hybrid Chevy Silverado and GMC Sierra 1500 pickup trucks, but these are expected to be purchased by fleet

If Toyota does license its technology to Subaru, it will take Japan's number one automaker's technology a step closer to becoming the new global hybrid standard. (Photo: Subaru Canada)

buyers looking to do the right thing for their company images as well as potentially save on escalating fuel costs.

Another automaker having announced a future hybrid is Nissan Motor Co., which in so doing spoke of a cooperative deal with Toyota to license its Hybrid Synergy Drive system for an upcoming gasoline-electric Altima.

If Subaru follows suit, a trend could be forming that would make Toyota's system the new hybrid standard, sort of the VHS video tape player of the alternative automotive supplier business, with Honda playing out the doomed role of Beta.

The difference is that everyone realized at the time that Sony's Beta tapes were by far superior to VHS, but due to the tremendous

Best known for its Outback crossover wagon and WRX rally car, a hybrid vehicle would suit Subaru's earthy image. (Photo: Subaru Canada)

proliferation of VHS, Beta became more challenging to find in local video rental stores, forcing those who invested in the technology to give it up and move to what was then jokingly referred to as the "dark side" - a precursor to the Microsoft vs. Apple gambit that played out soon after.

While Toyota may be rich and powerful like Microsoft, the leader among carmakers when overall capitalization is the quantifier, its image has been made bright and rosy due to its efforts in making the world a greener place via the proliferation of eco-friendly hybrid technology.

So how does Subaru-maker Fuji Heavy Industries Ltd. fit into the scenario? The automaker, best known for its Outback crossover

Although formal talks with Toyota have yet to begin, there is a "very high chance" that Toyota's hybrid system will be the optimal match for Subaru vehicles according to an official within the company. (Photo: Subaru Canada)

wagon and WRX rally car, may work together with Toyota to build a hybrid vehicle.

A spokesman working for Fuji Heavy Industries commented that although the company had not entered formal talks with Toyota, there was a "very high chance" that Toyota's hybrid system would be the optimal match for Subaru vehicles.

Such a deal, which most likely would be set up similarly to that orchestrated with Nissan, would help Toyota reduce the cost of manufacturing hybrid components, and by so doing would reduce the price of all hybrid cars using Toyota's system.

It should be mentioned that Toyota also licenses part of its hybrid technology to Ford Motor Company for use in its Escape

Toyota also licenses part of its hybrid technology to Ford Motor Company for use in its Escape Hybrid, only because the Ford developed system was too close to what Toyota previously developed. (Photo: Ford Motor Company of Canada)

Hybrid, although Ford made it quite clear that while it pays Toyota for the use of a specific part, the part was developed by its in-house alternative drivetrain team and that, due to the component's close similarity to a part Toyota developed, it only pays the Japanese automaker to uphold patent requirements.

Either way, Toyota is making money because it was first with the majority of new full-hybrid component technologies, which are now becoming the standards for a new industry. With Nissan and now Ford as strategic partners, willing or not, the addition of Subaru would be a major blow to automakers such as GM and DaimlerChrysler attempting to start out on their own.

A deal between the two Japanese companies would underscore Toyota's dominance in the genre even more because Subaru would be opting

If Subaru goes ahead with Toyota's technology, it will be at the expense of the less efficient mild-hybrid system developed by General Motors, its largest shareholder. (Photo: Subaru Canada)

for its technology over the less efficient mild-hybrid system developed by General Motors, its largest shareholder, and often, strategic manufacturing partner.

What's more, the full-hybrid system GM is to develop with DCX is expected to be better suited to larger vehicles.

But a cooperative deal for hybrid development and manufacture isn't a closed case. A Fuji Heavy Industries spokesperson commented that Subaru was still studying all that joining forces with a heavyweight like Toyota might do to its competitive edge.

But Japanese business daily Nihon Keizai was clear in its report that went to press on Wednesday, that spelled out that Toyota

A Fuji Heavy Industries spokesperson commented that Subaru was still studying all that joining forces with a heavyweight like Toyota might do to its competitive edge. (Photo: Toyota Canada)

would more than likely supply the power system to Fuji Heavy, which in return would provide Toyota with technology for lithium ion batteries.

"We are in discussions with various automakers that have expressed interest in our technology, but we cannot name any individual company," a Toyota spokesman commented.

Fuji Heavy, 20 percent of which is held by GM, would use the hybrid power system in its Legacy, Outback, new Tribeca sport utility, as well as other models available in North America. Subaru generates 35 percent of its sales in the U.S. alone, according to the Japanese daily.

Talks between Toyota President Fujio Cho and Fuji Heavy President Kyoji Takenaka are expected to take place soon.

Altogether more than 88,000 hybrid-electric vehicles sold in the U.S. during

Hybrid sales are expected to double and then some during 2005, with at least 200,000 units leaving showroom floors this year. (Photo: Trevor Hofmann, Canadian Auto Press)

2004 via Toyota, Honda and Ford - the latter only coming to market at the tail end of the year.

Hybrid sales are expected to double and then some during 2005, with at least 200,000 units leaving showroom floors this year, as long as the price of crude oil remains high.

Toyota is planning reach monthly sales that would total 300,000 hybrid vehicles sold per year by mid-decade, or by the end of 2005, not including Nissan and potential Subaru sales.

SOURCE: Autos123.com

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