A few months back, Toyota and Mazda announced a rather unusual agreement. The two automakers are going to be working together to figure out how to get the most out of a business relationship with one another. Toyota and Mazda are long-standing rivals, so why the sudden change? Preparing for the future is more important than the competition.
The Deal
Both companies will be participating in a committee to figure out what each does better than the other. From there, they’ll enter into an arrangement where they are able to lean on each other for that expertise. For example, Toyota is doing better with making fuel cells that run on hydrogen, but Mazda has a better system for regular fuel and diesel efficiency.
The Benefits
Did Toyota and Mazda forget that they’re enemies in the market place? Not even close. The arrangement isn’t even all that strange. Toyota has already partnered with BMW to speed up the next generation of lithium batteries, Daimler has partnered with Nissan to get their hands on smaller, super-efficient engines, and GM has partnered with Peugeot to reduce their costs by billions.
The Game Changer
Here’s the real reason for the partnerships: Innovation. As the auto industry goes forward, literally no one knows what’s going to be the next big thing and all of them want to be ready. Between electric, hydrogen, and other energy alternatives, a short-term cease-fire with a rival is worth it if it turns into innovation. Also, with companies like Google and Apple sprinting to get into the auto business, current players need to step up their R&D game.
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