DETROIT -- The partnership unveiled today between Ford Motor Co. and Toyota Motor Corp. began with a happenstance meeting in a U.S. airport lounge.
Ford CEO Alan Mulally and Toyota President Akio Toyoda met while traveling, exchanged business cards and began discussions regarding the deal.
While it's not clear how far the talks advanced during that initial encounter, the two companies said today they will collaborate on developing a hybrid powertrain for light trucks and SUVs by the end of this decade. Speaking to reporters in Dearborn, Mich., as part of the announcement, Takeshi Uchiyamada, a Toyota executive vice president, relayed the story of the executives meeting, adding he wasn't sure where or when it took place.
Discussions between the two automakers' product development teams began in April, and a formal agreement between Ford and Toyota is expected to be signed next year.
The automakers will also jointly develop information and entertainment systems in vehicles, with the goal of offering more Internet-based services and useful data to drivers. Details on the arrangement remain vague.
"We have a lot of details to work out with Ford before we can tell you more about the collaboration," Uchiyamada said.
Still, the announcement caught industry analysts off guard.
"It's understandable that they would tap each other for their expertise in these areas," Aaron Bragman, an industry analyst at Global Insight in Troy, Mich., told Bloomberg. "It is such an unexpected tie up between these two companies, we're still trying to understand the implications."
The new powertrain, which will be used on larger pickups and SUVs, will allow Toyota and Ford to compete in the market for hybrid pickups and SUVS, Michael Omotoso, senior manager of global powertrain at J.D. Power & Associates, told Bloomberg.
General Motors has thus far cornered the market in pickups -- offering the hybrid Silverado and Sierra – and in SUVS, with the Tahoe, Yukon and Escalade.
Those vehicles, however, haven't sold well because of weaker towing capacity and hefty price tags, Omotoso said.
"It'll be interesting to see if in this joint venture the towing capacity is the same or the difference is negligible," Omotoso said. "If they can figure that out, that would help their hybrids outsell GM's."
Bloomberg News contributed to this report