TOKYO Ford Motor will license key hybrid technology from Toyota Motor in a deal that could help establish Toyota's system as a standard for the industry, the two companies said in a joint statement on Tuesday.
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The agreement is a coup for Toyota, which has been trying to sell its hybrid system to a variety of automakers to help offset its high development cost.
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Ford will incorporate the Toyota technology into a hybrid system it plans to introduce this year in a gasoline-electric version of its Escape sport utility vehicle. The Ford vehicle will be the first hybrid offered by a U.S. carmaker and the first application of hybrid technology in a sport utility vehicle.
Powered by the combination of a gasoline engine and electric motor, hybrids are more fuel-efficient and less polluting than traditional gasoline engines. Toyota, a close rival to Ford in terms of global vehicle sales volume, has established a strong lead in hybrid vehicles.
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Toyota became the first to mass-produce hybrids with the introduction of its Prius sedan in 1997. Demand for the latest version of the Prius, which gets better gas mileage than the first, has been stronger than Toyota expected, though sales volume remains small compared with mainstream models like the Camry.
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The Ford deal follows a similar pact between Toyota and Nissan Motor. The companies agreed in 2002 to license Toyota's gas-electric hybrid system for use in vehicles that Nissan plans to sell in the United States by 2006.
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Toyota says it makes money on its hybrid vehicles. However, analysts said it could be a long time before hybrids are a significant source of profits for the company, given the high cost of developing the vehicles and their relatively low sales volumes.
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Toyota sold 53,000 hybrid vehicles last year, less than 1 percent of its worldwide sales of 6.07 million vehicles.
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Likewise, the licensing agreement with Ford is not expected to be a big revenue generator.
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Kurt Sanger, an auto industry analyst for ING Securities in Tokyo, said the importance of the pact with Ford "is that Toyota is setting the standard for the hybrid power train."
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"Toyota is making strides to build critical mass for its hybrid program," Sanger said.
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Toyota hopes that signing on more manufacturers to use its hybrid technology will result in higher production volumes, and thus lower costs, for makers of hybrid components.
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"Toyota believes that spreading this environmental technology is something we can't do alone," said a Toyota spokesman, Hitoshi Nagashim.
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The company is willing to license its hybrid system to any other companies that are interested, he said.
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Under the agreement announced on Tuesday, Toyota will license to Ford a patented hybrid control system that links a gasoline engine with an electric motor. The companies did not disclose the terms of the licensing agreement nor how much Ford would pay in royalties.
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The companies also agreed to license to each other emission-reduction technologies that each has developed on its own.
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So far, U.S. automakers have been less enthusiastic than their Japanese rivals about hybrid vehicles, arguing that it was difficult to justify the added cost of the technology when few American consumers seemed to be very concerned about fuel economy.
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For the last several years, Toyota and Honda Motor have been the only automakers selling mass-market hybrid cars. So far, they are the only companies that plan to offer a range of the vehicles.
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Toyota already sells a hybrid minivan in Japan and plans to roll out a hybrid version of its Lexus RX 330 SUV, the RX 400h, this year in the United States. Toyota also plans to introduce a hybrid version of its Highlander SUV in the United States next year.
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Toyota has set a target of producing 300,000 hybrid vehicles a year by mid-decade. Honda, which sells two gasoline-electric models, the Insight and Civic Hybrid, plans to offer a hybrid version of its Accord sedan.
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The new hybrids from Ford, Toyota and Honda will be more expensive than traditional gasoline-powered versions of the same vehicles, although the companies have not said by how much.
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The New York Times