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BMW, Toyota Strike Up Partnership

Published: July 2, 2012 | 7:51 am
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MUNICH—Last week BMW and Toyota signed an agreement to cooperate and share technology on aspects such as sports car design, architecture, fuel cells, and electric power cells for hybrid and electric models.
“Over the coming months, we will be exploring possibilities for further cooperation on the development of powertrain electrification, research into lightweight technologies, the development of fuel cells, and future vehicle architectures—for a sports car,” said Dr. Norbert Reithofer, chairman of the Board of Management of BMW AG, in an official statement.
This is a strategic move on the part of BMW, as it is looking to retain its top spot in the luxury car segment and keep its next door rival Audi from overtaking it on the fast lane. Audi has seen lots of success lately. Its A4 and Q5 models have been selling extremely well.
Toyota, the biggest carmaker in the world, has a lot to learn from BMW’s sport car architecture and carbon fiber technology—a material that is very light, but durable, and therefore very expensive.

“BMW and Toyota both want to make ever better cars,” said Akio Toyoda, president of Toyota. “We respect each other; that is why we can already take the next step together. Toyota is strong in environment-friendly hybrids and fuel cells … I believe BMW’s strength is developing sports cars. I get so excited thinking about the cars that will result from this relationship.”
“We will also be supplying Toyota Motor Europe with fuel-efficient diesel engines from 2014 on,” said Dr. Reithofer.
For BMW, it is of value to learn how Toyota is producing its hybrid and electric cars, the technologies that keep Toyota ahead.
At the same time, BMW has ceased talks with General Motors Co. regarding a partnership in fuel-cell technologies. This doesn’t mean that the companies have ended their relationship, but merely that BMW has chosen Toyota as its primary partner.
BMW and PSA Peugeot, the French automaker, are ending their shaky relationship, as Toyota seems to be a more stable and reliable partner for BMW.
The “marriage” between BMW and Toyota will also cause the German automaker’s fleet-wide emissions to go down, in order to fulfill BMW’s goal of reaching 101 grams per kilometer in CO2 emissions, as both companies are set on exploring technology of hybrid and electric cars—something that will make environmentalists around the globe happy.
Both BMW and Toyota emphasized that there is no intention of any kind to merge or purchase stakes in each other, as the recent deal is purely a strategic alliance based on sharing technology and know-how.
“We are not coming together to become bigger. We are not coming together to form capital ties,” Toyoda told reporters in Munich. “I met Chairman Reithofer again today, and I felt the relationship of trust between our two companies grow stronger.”
Volkswagen AG, the third biggest carmaker in the world, has ambitions of passing GM and Toyota to become the world’s No. 1 automaker. Toyota’s partnership with BMW will surely deliver Volkswagen a blow in its quest. It would be interesting to see if Volkswagen strikes up any partnerships in combating the alliance between Toyota and its neighbor, BMW.

“These two as a pair are potentially much more of a threat to VW, Daimler, and the others than loose cooperations with smaller players,” said Arndt Ellinghorst, head of European automotive research at Credit Suisse.


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