Toyota open to alliance with Ford

Japanese juggernaut Toyota already has rival carmakers on their knees, yet the soon-to-be-world's-biggest-manufacturer has said it would be open to forging an alliance with Ford if the blue oval offered the right terms.

Expressing these sentiments was Toyota president Katsuaki Watanabe, who was quoted by Japan's Nikkei business daily. Mr Watanabe added that such an alliance would focus on developing and sharing technologies.

In December, Japan's Nihon Keizai Shimbun reported executives from Toyota and Ford met in Tokyo to discuss a potential partnership between the companies.

The meeting -- between Toyota chairman Fujio Cho and Ford president and CEO Alan Mulally -- was reportedly held at Ford's request and the two parties are expected to meet again this month.

However, pouring cold water on any tie-up prospects was Toyota spokeswoman Shiori Hashimoto, who told Reuters Toyota executives often meet with top executives from other companies, and such meetings did not mean they would form an alliance.

One might wonder why Toyota needs to form an alliance with anyone, as its fortunes are soaring. Armed with a massive product portfolio, it's on the brink of overtaking General Motors to become the world's No 1 carmaker.

GM reportedly sold 9.09 million cars and trucks last year, while Toyota is said to have flogged 9.04 million vehicles around the world in 2006. Production capacity cutbacks by GM mean Toyota is virtually assured of taking the lead in the sales race in 2007.

Ford isn't shying away from a prospective tie-up, saying it was "always interested in partnerships or alliances over mutual interests".  These sentiments have also been expressed in the past by company chairman Bill Ford.

However, some sources suggest that CEO Mulally, who was recruited from Boeing in the latter half of last year, may take a more bullish view. He ruled out a full alliance with Renault-Nissan when market speculation linked the businesses.

Some industry analysts suggest Ford and Toyota would make ideal bedfellows as the former could benefit from the latter's expertise in hybrid technology. Ford is considering developing plug-in hybrid cars that would use a rechargeable battery as the source of power.

Toyota probably has less to gain as there are no gaps in its model line-up and it doesn't appear to be lacking in know-how about any specific technology -- powertain or otherwise.