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Friday, 16 December 2011

BMW, Tesla alliance with Toyota signal end of go-it-alone strategy

Toyota-bmw
TOKYO -- President Akio Toyoda of Toyota Motor Corp. is beginning to change the tradition of self-reliance of the company.

Toyoda agreed this month to equip some Toyota cars with BMW AG diesel engines, building on an earlier deal to use Tesla Motors Inc. battery packs in future electric vehicles. Before the grandson of the founder became president, Toyota had not purchased such core technologies from other carmakers, said Shiori Hashimoto, a spokeswoman at the carmaker.

The alliances illustrate how Toyoda is shaking up decades-old practices at Japan's largest manufacturer, which is poised to cede its three-year lead in the global automotive industry to General Motors Co. As the company emerges from three years of crisis management -- from millions of vehicles recalled to coping with Japan's biggest postwar natural disaster -- Toyoda now faces the challenge of recovering ground lost to GM and Hyundai Motor Co.

"They have a high need for control, because they want a high level of confidence things will be delivered on time," said Jeff Liker, an engineering professor at the University of Michigan in Ann Arbor specializing in Toyota research. "When you go outside the family, there's some risk. Akio is willing to take that risk."

The worldwide recalls in 2009 and 2010 created an opportunity to push changes in Toyota's corporate culture, Liker said. The CEO likely "came to the conclusion Toyota has grown too insular in Japan, that it needed to open up more, get more access to the outside world," he said.

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