Toyota to supply hybrid technology for Mazda sedan

Toyota Motor Corp., the world's biggest carmaker, will supply its hybrid technology used in the Prius to Mazda Motor Corp., enabling the Hiroshima-based automaker to build its first hybrid sedan.

Mazda will develop and produce a hybrid vehicle in Japan and plans to start selling the model by 2013 in its home market, the companies said today in Tokyo.

The alliance lets Mazda avoid costs for developing hybrid technology on its own, while allowing Toyota to cut costs of hybrid production by increasing output of hybrid parts. The partnership follows the weakening of Mazda’s 40-year-old ties to Ford Motor Co.

"It's a win-win relationship for both companies," said Koji Endo, managing director at Advanced Research Japan in Tokyo. "The pact will help Toyota lower costs by selling more and saves Mazda having to develop its own hybrid system, which can cost between 50 billion yen to 100 billion yen."

Ford has reduced its holding in Mazda to 11 percent from 33 since 2008 and said in December and said it would develop future models without the Japanese carmaker. As demand for hybrid, electric and other next-generation cars increases, smaller carmakers like Mazda may find it too expensive to develop the technology alone.

Mazda made the request for the alliance last year, said Mazda Executive Vice President Masaharu Yamaki.

Hybrid Technology

Toyota currently provides Nissan Motor Co. with hybrid- related technology, and signed a cross-licensing agreement with Ford in 2004.

Mazda has a gasoline-electric version of its Tribute sport- utility vehicle, which uses Ford’s hybrid system. It sold 173 units through the first 11 months of 2009. Mazda also developed a Premacy hydrogen-powered hybrid, which isn’t on sale. Toyota’s Prius has been best-selling car in Japan for nine straight months.