Toyota to License Hybrid Technology to Mazda in Addition to Nissan, Ford and Subaru

Toyota Motor Corp. said today that it will license the hybrid technologies used in its flagship Prius car to Mazda Motor Co. in an encouraging move for the world's leading hybrid carmaker.

Under the latest agreement, Mazda will procure key hybrid components developed by Toyota such as the electronic control unit and inverter to develop its own hybrid system.

Mazda, in which Ford Motor Co. owns an 11 percent stake, will combine the system with its next generation gasoline engine to launch a hybrid vehicle in Japan by 2013. The company hasn't yet decided whether to sell the model in other markets, a Mazda spokesman said.

Underscoring its leading position in hybrid technology, this is the third time that Toyota has struck a deal on its hybrid business. It is supplying complete hybrid systems to Nissan Motor Co. and has a technology license agreement with Ford.

Fuji Heavy Industries Ltd., the maker of Subaru brand cars, also hopes to roll out a hybrid model by 2012 using Toyota's hybrid system. Toyota holds a 16 percent stake in Fuji Heavy.

Producing components for Mazda will help Toyota lower costs through economies of scale. Mazda, which has so far lagged behind in offering advanced fuel-efficient cars, will be able to bring a hybrid car to market in a shorter time by using Toyota's technology.

Mazda Executive Vice President Masaharu Yamaki said at a press conference that the decision to use Toyota's system as opposed to Ford's was because demand for hybrid cars is quickly growing in the Japanese market, sparked by government buying incentives and Toyota's new Prius and Honda Motor Co.'s Insight hybrid car, both launched last year.

"It is an urgent need to introduce hybrid cars in Japan as the market is rapidly expanding," Yamaki said. "We want to develop a hybrid car quickly, effectively and certainly by utilizing domestic suppliers" of Toyota's components.

Mazda had said that it would seek to introduce a hybrid model early in the 2010's.

Toyota Executive Vice President Takeshi Uchiyamada said the latest agreement is in line with the company's strategy that it "will consider requests from other companies to supply our hybrid technology," if asked.

Toyota, which launched the Prius in 1997 as the world's first mass-produced hybrid car in Japan, boasts its hybrid technology with its patents on more than 2,000 systems and components.

Toyota is streamlining domestic production operations to ensure profitability in preparation for a possibly steep drop-off in demand because of the recalls that have tarnished its reputation for quality.

The Japanese car maker manufactured 655,180 vehicles in February worldwide. That was up 83 percent from 358,573 vehicles in the same month last year, when it slammed the brakes on production to adjust for a collapse in demand in the aftermath of the global financial crisis.

However, February's output this year was still 15% below the 767,999 vehicles produced in the same month of 2008.

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