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G.M.’s Quarterly Profit Falls 14%

May 2, 2013 by Leave a Comment

G.M., the nation’s largest automaker, said global revenue dropped 2 percent during the quarter to $36.9 billion, despite a concerted effort to introduce new models in the United States and Europe.

The automaker’s core North American operations achieved a pretax profit of $1.4 billion during the quarter, a 14 percent decline from the same period a year ago. By comparison, the Ford Motor Company, G.M.’s smaller hometown rival, had pretax earnings of $2.4 billion in the region during the quarter. The earnings show that G.M. still trails Ford significantly on profits earned per vehicle sold in the thriving United States market.

G.M. has struggled to rebuild its business since the recession, when it needed a $49.5 billion government bailout and bankruptcy to survive. The automaker has since cut brands, models and thousands of jobs to bring costs more in line with production and sales.

The company’s chief executive, Daniel F. Akerson, said the decline in earnings and revenue did not reflect the progress G.M. is making with new models in the marketplace.

“The year is off to a strong start as we increased our global share with strong new products that are attracting customers around the world,” Mr. Akerson said in a statement.

G.M. lost market share in the United States last year to competitors like Chrysler and Toyota. Mr. Akerson has vowed to reverse that trend this year with vehicles like the new Cadillac ATS sedan and restyled versions of its big pickup trucks.

The company sold 902,000 vehicles in the United States in the first four months of this year, about a 10 percent gain over the same period in 2012. Sales for the overall industry have improved by about 7 percent.

G.M. narrowed its losses in Europe during the quarter. It said it had a pretax loss of $175 million in the region, compared to $294 million in the first quarter of last year.

In Asia, the company said pretax profits were about $495 million, slightly less than a year ago. Its South American operations had a pretax loss of $38 million, compared to income of $153 million last year.

Article source: http://www.nytimes.com/2013/05/03/business/gms-quarterly-profit-falls-14.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Car Sales Keep Up Their Streak

April 2, 2013 by Leave a Comment

DETROIT – Automakers reported that March sales of new cars and trucks were the highest monthly total in five years, providing more evidence of a sustained turnaround in the industry.

An estimated 1.5 million vehicles were sold during the month, about a 4 percent improvement over last year, as a strengthening housing market and low interest rates spurred consumers and businesses to replace aging models.

It was the best monthly performance since 2007, executive and analysts said, and reinforced their sales forecasts for the full year at more than 15 million vehicles.

“Even though consumer confidence has been up and down this year, there are ‘wealth effects’ that are making Americans feel comfortable finally buying new cars they’ve been waiting for,” said Lacey Plache, an economist for the auto-research site Edmunds.com.

General Motors, the largest American automaker, said it sold 245,000 new vehicles during March, a 6.4-percent increase over the same period last year.

While sales of its biggest brand, Chevrolet, were flat, G.M. said its Cadillac brand increased by almost 50 percent and Buick sales rose 37 percent.

G.M. benefited from the steadily growing demand from the construction industry for new pickup trucks. Sales of the Chevrolet Silverado increased 8 percent, and the company expects even better results when it begins delivering a newer model truck to showrooms over the next few months.

“Trucks have improved in lockstep with the housing market,” said Kurt McNeil, head of the company’s United States sales operations.

The Ford Motor Company said it sold 236,000 new vehicles during the month, which was a 5.7-percent improvement over a year go and the company’s best monthly performance since May 2007.

The results were driven by the heart of the Ford lineup. Sales of the midsize Fusion sedan topped 30,000 for the first time, and demand for the Escape SUV was up 27 percent.

Ford also posted a 16-percent gain in sales of its F-series pickup, the best-selling vehicle in America. “Full-size pickup demand continues to gaining momentum, outperforming the industry for the third consecutive month,” said Ken Czubay, Ford’s United States marketing and sales chief.

Chrysler sold 171,000 vehicles in March. Its 5-percent improvement over a year ago was smaller than in some recent months, and underscored the company’s need to keep refreshing its showrooms with new models.

The company said sales of its Ram pickup truck increased 25 percent over the previous year, and the new Dodge Dart compact car had its best month since being introduced last summer.

Chrysler is in the midst of revamping its cornerstone Jeep brand with a new version of the Cherokee SUV and other models. Analysts said broadening the Jeep lineup is crucial to Chrysler’s chances of returning to the double-digit monthly growth it had in 2012.

“Chrysler’s March sales story is one of old and new,” said Michelle Krebs, an analyst with Edmunds.com. “Jeep desperately needs the Cherokee to get back into positive territory.”

Japanese auto companies are expected to report increases in March as well. Both Toyota and Honda are back at full strength from lingering inventory problems caused by the Japanese earthquake and tsunami, and are aggressively updating their showrooms with new products.

All the automakers are advertising heavily to bolster spring sales. One of the busiest has been Volkswagen, the German automaker that is rapidly expanding its American operations.

Volkswagen said it sold 37,000 vehicles during the month, a 3.1-percent increase from a year ago. The company said it was its best March since 1973, when it was one of the only import brands available in the United States.

This article has been revised to reflect the following correction:

Correction: April 2, 2013

A previous version of this article misspelled the surname of G.M.’s United States sales chief. He is Alan Batey, not Batley.

Article source: http://www.nytimes.com/2013/04/03/business/car-sales-keep-up-their-streak.html?partner=rss&emc=rss

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Automakers Focus on Luxury Cars as Sales Rise

March 28, 2013 by Leave a Comment

Overall vehicle sales have risen 8 percent so far this year in the United States, while the market for high-end cars and S.U.V.’s has increased by 11 percent, according to the auto research company Kelley Blue Book.

The surge in the luxury market, analysts say, is a sign that wealthy consumers sense that the nation’s financial health is solidly improving in ways that reinforce a willingness to splurge on expensive new models.

“A lot of luxury customers were waiting to see how things would shake out in the economy and the stock market,” said Alec Gutierrez, an analyst at Kelley Blue Book. “But they are becoming more and more confident.”

New vehicles at the auto show range from small, entry-level models like the Audi A3 that cost about $30,000, to plush sedans like the Bentley Flying Spur, with a price tag closer to $200,000.

The luxury segment is expanding in every direction. There are more compact cars sold under prestigious brand names, a growing variety of leather-and-wood trimmed S.U.V.’s, and updated models from ultraluxury carmakers like Bentley and Rolls-Royce.

The smaller models are aimed mainly at attracting what industry executives say is a growing group of younger luxury buyers, as well as more Hispanics and women, who do not want to wait until middle age to own more sophisticated cars.

“They are going to transform our industry,” said James Farley, Ford’s head of global marketing, referring to the younger market. Older buyers might consider cars like the Audi A3 too small, while younger consumers might find that those cars better fit their lifestyles and tastes.

Luxury sales generate greater profits for automakers, encouraging even the most mainstream companies to compete in expensive segments.

The Ford Motor Company, for example, is pouring money and corporate resources into reviving its staid Lincoln brand. So far, the results have been mixed, as consumers appear reluctant to pay luxury-car prices for Lincolns based on basic Ford models.

Yet Ford is pushing ahead with a complete overhaul of its Lincoln lineup in an all-out bid to capture top-end customers.

“The luxury market is growing mostly at the low end,” said Mr. Farley, who also is Ford’s senior Lincoln executive. “And since the recession, we think people are looking for luxury in smaller sizes.”

Ford’s hometown rival, General Motors, recently introduced the Cadillac ATS, a compact sedan that it believes can compete with small cars from the German luxury stalwarts Mercedes-Benz, BMW and Volkswagen’s Audi unit.

Strong sales of the new ATS have helped Cadillac lift the brand’s overall sales by 32 percent in the first two months of this year. On Tuesday, G.M. displayed a restyled version of its midsize Cadillac sedan, called the CTS, which goes on sale this fall.

G.M. officials said the CTS is a critical vehicle for Cadillac, which needs a full lineup of luxury models to pique the interest of loyal BMW and Mercedes owners.

“We finally have the right dimensions on the CTS to match up with the competition,” said Eric Clough, one of the car’s designers. “It’s longer, leaner and lower to the ground.”

American carmakers still have a lot of catching up to do. Mercedes and BMW are the luxury market leaders in the United States by far and are constantly adding new variations to their lineups.

One of the most distinctive new luxury cars shown was Audi’s A3 sedan, a jaunty compact with a wide rectangular grille. It is the latest in a number of new products from Audi, whose sales in the United States have increased 18 percent this year.

“We set a goal of reaching 200,000 sales in the U.S. by 2020, but we’re going to get there a lot sooner than that,” said Scott Keough, president of Audi of America.

On the S.U.V. side, Honda’s Acura division introduced a fresh version of its top-selling MDX model. And Land Rover, the British brand owned by the Indian industrial firm Tata, continued its aggressive expansion by showing off the new Range Rover Sport, an elegant-looking S.U.V. that costs upward of $60,000.

Analysts said competition in the luxury segment is particularly fierce because automakers have to work harder to differentiate their luxury vehicles from mass-market models. Many of the new luxury models are equipped with additional technology, including three-dimensional graphics on video displays and the latest in collision-avoidance systems. And opulence is still a factor in the most expensive models. The Bentley, for example, comes with a glass roof and hand-polished wood in the interior, as well as a choice of 17 exterior colors like “dark cashmere.”

“The luxury manufacturers have to up the ante because a lot of regular cars now come with bells and whistles like heated steering wheels,” said Joseph Phillippi, an executive at the consulting firm AutoTrends.

Yet no one would confuse a family sedan with something like the new Jaguar XJR — a variation on a regular Jaguar model that has a top speed of 174 miles per hour and a sticker price of more than $100,000.

Article source: http://www.nytimes.com/2013/03/28/automobiles/automakers-focus-on-luxury-cars-as-sales-rise.html?partner=rss&emc=rss

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Media Decoder: Ford Turns to the ‘Crowd’ for New Fiesta Ads

February 20, 2013 by Leave a Comment

Four years ago, the Ford Motor Company brought out the Ford Fiesta subcompact with an innovative program that recruited young drivers – members of the target audience for the new car – to help introduce it through blogs and other social media. Now, that effort is being expanded into the realm of marketing as Ford plans a crowdsourcing initiative to create advertising for the 2014 Fiesta.

Executives of Ford plan to announce on Tuesday morning, at a session of Social Media Week in New York, that they intend to recruit 100 socially-connected consumers to produce a year’s worth of advertising for the next Fiesta, which would begin appearing in the spring.

Information about the initiative will be available on a special Web site, fiestamovement.com.

The would-be Madison Avenue ad executives will be asked to create video clips that could serve as commercials, on television or online; digital ads; ads for social media like Facebook and YouTube; and even ads for magazines and newspapers.

Crowdsourcing as a way to create advertising has been a popular trend for several years as marketers seek to take advantage of new technologies to forge closer ties with consumers.

Ads created by consumers have even appeared in high-profile venues that include the Super Bowl, for brands like Doritos and Mennen Speed Stick, and during episodes of “American Idol,” where Coca-Cola ran one such commercial, with a Valentine’s Day theme, on Thursday.

Automotive brands have also taken part in the trend, among them the Chevrolet division of General Motors, which ran a crowdsourced commercial during Super Bowl XLVI last year.

But looking to nonprofessionals to come up with a year’s worth of ads is unusual, if not unique. “This is Ford’s first completely user-generated campaign,” said James Farley of Ford.

Although “there are some risks,” Mr. Farley acknowledged in a phone interview last week, he likened the experiment to the leap that marketers took decades ago with a new medium called television.

“There are new rules, new things to learn about,” said Mr. Farley, who is executive vice president for global marketing, sales and service and Lincoln.

For instance, Mr. Farley said, “if you ask people to help you produce advertising, they expect to see what they do without a lot of filters.”

“You have to be extremely careful about providing too much help,” he added.

That was a lesson Ford Motor learned in 2009, Mr. Farley said, when the company introduced the Fiesta by giving cars to 100 young men and women and asking them to share their experiences on blogs, Facebook, Twitter and YouTube.

“We had a traditional ad campaign, and we had a digital ad campaign we created with them,” he said, and the latter ads were “a little overdeveloped; they sounded like a company trying to be young.”

This time around, for what the company is calling Fiesta Movement: A Social Remix, 100 young men and women will be lent cars, this time the 2014 model. Some will be alumni of the Fiesta introduction, some will be new recruits and some will be celebrities.

Just like the original version of the Fiesta Movement, the drivers of the cars will be supplied with gasoline, insurance coverage and equipment like cameras, then asked to complete tasks (“missions” in Ford parlance) that involve the cars.

And just like last time, the participants will be asked to share their experiences in social media. But this time, the content they create will also be the basis for Fiesta ads in other media.

Although there will be “zero” professionally-produced ads for the 2014 Fiesta, Mr. Farley said, that does not mean the ads will be of less than professional quality.

“We’re going to shape them to be a Ford Fiesta message, not just ‘We’re having fun on the dime of a big company,’ ” he added.

As for the professionals at the advertising agencies that work with Ford, among them units of WPP like Team Detroit and Hudson Rouge, cry not for them. They will continue to create campaigns for other Ford and Lincoln models.

Mr. Farley declined to discuss what the company would spend on ads to be based on what will be created by the participants in the next installment of the Fiesta Movement. But, he said, the money saved on production costs might be added to the budget.

During 2010, the first full year of introductory advertising for Fiesta, Ford spent $102.9 million in major media to promote the car, according to the Kantar Media unit of WPP. Ad spending fell to $42.8 million in 2011.

During the first nine months of 2012, ad spending totaled only $2.1 million, compared with $40.7 million during the same period of 2011. The decline reflects Ford’s intent to ramp up spending again in 2013 to promote the major changes in Fiesta for the 2014 model.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/19/ford-turns-to-the-crowd-for-new-fiesta-ads/?partner=rss&emc=rss

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In South Carolina, on Pace for Record Barrage of Political Ads

January 16, 2012 by Leave a Comment

Anyone who happened to be near a working television in South Carolina over the weekend was exposed to one of the most concentrated and expensive barrages of political advertising that this state has ever experienced.

With the traditional efforts of candidates now multiplied by the presence of the well-financed “super PACs” supporting them, political operatives outbid and outmaneuvered one another in a last-minute race to buy up what time remained on the airwaves between now and the state’s Republican presidential primary on Saturday. None would risk having their messages drowned out by those of their rivals.

Want to advertise on “60 Minutes,” as Mr. Romney did on Sunday? His campaign had to get WLTX, the CBS station here, to bump a super PAC that was actually running ads supporting him. It agreed to pay $3,000 for a 30-second slot — $100 a second, almost double the usual rate.

Rick Santorum, running as a family-values social conservative, put his campaign’s money into the Hollywood machine he so often denounces, booking time on NBC during the Golden Globes and “30 Rock.” He also bought ads during “Saturday Night Live,” which has mocked him and his ubiquitous sweater vest.

And super PACs, eager to be seen during the N.F.L. playoff game on Saturday featuring the Denver Broncos’ Tim Tebow, bought up slots that were spoken for weeks ago, paying premiums to knock advertisers like Hardee’s, Jeep and the Ford Motor Company to later times.

“It’s like carpet-bombing,” said Scott Sanders, general sales manager for WIS, the NBC station in Columbia. “They’re waiting until the last two weeks to reach everyone they can. He who shouts the loudest last might win.”

The arms race at television stations across South Carolina is the most vivid manifestation yet of the influx of outside money into American politics this election cycle. Because of a Supreme Court decision that paved the way for the creation of the super PACs — groups that can raise and spend unlimited amounts of money advocating for a candidate as long as they do not coordinate with the campaign — the messaging wars are reaching new levels of intensity.

Five Republican presidential candidates are advertising on television here. In addition, seven super PACs have run commercials alongside them. (Mr. Romney has two groups taking up his cause, Restore Our Future and Citizens for a Working America. And a PAC supporting Jon M. Huntsman Jr., who informed his advisers on Sunday that he intended to drop out of the race, has been advertising here, though Mr. Huntsman himself has not.)

Candidates and super PACs have committed about $8 million to advertising here on broadcast TV since the beginning of December, according to figures provided by a Republican strategist who closely monitors media spending. In 2008, when five Republican candidates were spending heavily here, the amount spent on broadcast TV was $6.9 million, according to Kantar Media’s Campaign Media Analysis Group. With the addition of three Democratic candidates, the total in 2008 was $13.5 million.

When radio and cable television are factored in this year, the total committed so far approaches $11 million.

Kantar Media added up the number of times Republican presidential campaign commercials appeared on broadcast television here in 2008: 17,629. As of late Friday afternoon, with eight days to go until the primary, Kantar had counted 13,398 commercials, meaning the 2012 total will outpace 2008, probably by a significant amount, because advertising tends to be heaviest in the final week of a campaign.

“It seems to be one after the other,” said Kim Matthews, 34, a Mount Pleasant resident who was watching the Broncos game on Saturday night with her husband in downtown Charleston. A Restore Our Future ad had just appeared. “They’re everywhere,” Ms. Matthews said, “and I just keep thinking, ‘Eventually they’ll go away.’ ”

The spending is reaching record levels even though the candidates and the super PACs did not start advertising heavily here until last week, a departure from other years when commercials would start in the fall.

“What you’ve got is two and a half months of advertising compressed into a two-week period of time,” said Rich O’Dell, the general manager of WLTX, the CBS station in Columbia. Mr. O’Dell said that he had thought campaigns might forgo television advertising in South Carolina this year, as many did in New Hampshire. Then, he said, “as soon as Iowa was over: boom.”

Article source: http://feeds.nytimes.com/click.phdo?i=fb73b2ffe208d2fc880109404127addc

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U.S. Auto Sales Ended 2011 With Strong Gains

January 4, 2012 by Leave a Comment

For Chrysler, December was the best month in nearly three years, as passenger-car deliveries more than doubled and total sales rose 37 percent. Chrysler’s sales for all of 2011 were up 26 percent.

General Motors reported a 5 percent increase in December and a 13 percent gain for the year.

At the Ford Motor Company, sales were up 10 percent in December and 11 percent for the year. Sales by Ford’s namesake brand totaled 2.06 million, the most by any automotive brand since 2007.

“The year finished on a high note, with industry sales momentum strengthening as the year came to a close,” Ken Czubay, Ford’s vice president for United States marketing, sales and service, said in a statement. “We saw Ford sales strengthen as well, posting our best December retail sales month since 2005 and closing the year as America’s best-selling brand.”

Nissan posted a 15 percent increase for the full year, as its primary brand set a record, despite some disruptions after the earthquake and tsunami struck Japan in March. The company also reported an all-time high for December with a 7 percent increase.

Volkswagen reported gains of 36 percent for December and 26 percent for the year, its best since 2002.

Other carmakers were scheduled to report December and full-year sales later Wednesday.

For all of 2011, analysts said the industry sold about 12.8 million cars and trucks, a 10 percent increase from the 11.6 million sold in 2010.

Sales are expected to climb further this year. The automotive research Web site Edmunds.com is forecasting 2012 sales of 13.6 million, while another site, TrueCar.com, expects 13.8 million. Either figure would represent the industry’s best year since 2007, when sales totaled 16.1 million. G.M. forecast 2012 industry sales of 13.5 million to 14 million.

“Over the course of the fourth quarter of 2011, clear signs emerged that U.S. consumers are more confident and that other underpinnings of our economy are either stable or slowly improving,” Don Johnson, G.M.’s vice president of United States sales operations, said in a statement. “When we add improving economic fundamentals to pent-up demand and an aging vehicle fleet, it’s now clear that auto sales should continue to grow in 2012.”

The research firm J. D. Power Associates said December was the first month in which sales to individual consumers — a figure that excludes bulk deliveries to businesses and government buyers — topped 1 million for the first time since the August 2009 spike during the federal cash-for-clunkers trade-in program.

“The industry has managed through another series of external shocks and is in a healthier position as the year closes,” said John Humphrey, senior vice president of global automotive operations at J. D. Power.

Article source: http://feeds.nytimes.com/click.phdo?i=a96187b9dcc6b460d79b863974809eca

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Ford and Zipcar Join Forces

August 31, 2011 by Leave a Comment

But the Ford Motor Company is taking the view that drivers who rent from Zipcar by the hour just might be potential customers down the road.

Ford and Zipcar are expected on Wednesday to announce an unusual partnership in which the Detroit automaker will supply its vehicles to Zipcar locations on 250 college and university campuses in the United States.

The two-year program will provide Zipcar with up to 1,000 Ford Focus sedans and Escape sport utility vehicles for students who prefer short-term vehicle rentals to the trouble and expense of owning their own car.

In addition to providing the cars, Ford will offer the first 100,000 university students who sign up for Zipcar a $10 discount on the network’s $30 annual membership fee. In addition, Ford has agreed to subsidize $1 of the hourly rental rate for the first one million hours of use on any of its vehicles. The typical Zipcar rental costs $8 to $9 an hour.

The program, which starts Thursday, is a significant step in the expansion of Zipcar, based in Cambridge, Mass., which went public with an initial stock offering early this year, and in August reported strong revenue and membership growth that exceeded Wall Street expectations.

Zipcar has been a fixture in urban areas like New York, Boston, San Francisco and Washington for several years, and has been gradually moving into smaller markets like Sacramento and Providence, R.I. Recently, it has been seeking to rapidly expand its presence on college campuses.

The alliance with Ford will raise Zipcar’s presence substantially in the student market — and get more American cars into Zipcar’s fleet. Nearly all of Zipcar’s current models are foreign nameplates like the Honda Civic, the Mini Cooper and Toyota Prius.

Currently, Zipcar has more than 600,000 members in the United States, Canada and Britain.

The impetus for the new partnership began two years ago at a transportation forum when William Clay Ford Jr., Ford’s executive chairman, met Scott Griffith, Zipcar’s chairman and chief executive.

In an interview, Mr. Ford said he had become interested in car-sharing networks as part of the long-term answer of how congested cities could solve transportation issues without simply adding more vehicles.

As an ardent environmentalist, he said he could appreciate how short-term car rentals could ease fuel consumption in cities already overcrowded with privately owned vehicles.

The auto industry has been pouring vehicles into regular rental car fleets operated by big companies like Hertz and Avis, for years.

Mr. Ford said that Zipcar offered an opportunity for the automaker to reach a new demographic of younger, college-age drivers who otherwise might not try a Ford product.

“We are looking at the future of transportation more holistically,” he said. “We shouldn’t be threatened by these different business models. We should embrace them.”

Zipcar owns more than 8,000 cars and offers its members more than 30 different models. But Mr. Griffith said the deal with Ford was a powerful endorsement of its market and its services.

“Having Bill Ford and the Ford Motor Company validating Zipcar as a business model and as an emerging transportation brand is a big step for us,” Mr. Griffith said.

Zipcar has bought 650 Ford cars and S.U.V.’s to start, and will start making them available for rental within two weeks.

The membership and rental subsidies offered by Ford could entice frugal college students to give the brand a try.

“The cheaper it is, the more I would be willing to use it,” said Tyler Harangozo of Windsor, Ontario, an incoming freshman at Wayne State University in Detroit.

Mr. Harangozo was among a crowd of Wayne State students looking over the Ford Focus during orientation activities on Tuesday.

He said he expected to commute to school by bus, but appreciated the option of renting a Zipcar for a few hours if needed.

“I can’t rely on public transit to get all around Detroit,” he said. “I’ll probably need a car once in a while.”

Zipcar memberships are available to anyone who has had a driver’s license for two years and a good driving record.

That makes it especially appealing for people under the age of 21, who often cannot qualify to rent a car from a traditional daily rental agency. At Zipcar, even a teenager can become a member.

Rental fees include insurance coverage, and Mr. Griffith said background checks had generally weeded out poor drivers from its membership rolls. “If you have a D.U.I. or high-speed driving violations, you won’t be able to drive one of our cars,” he said.

Ford sees the program as an inexpensive means to introduce younger drivers to its products, particularly the compact Ford Focus. The cars are equipped with Ford’s Sync infotainment and communications systems, and they are among the most fuel-efficient models in the company’s fleet.

“It’s a great way to reach these first-time drivers,” Mr. Ford said. “And the data shows that the No. 1 reason people leave Zipcar is to buy a vehicle, and that they are heavily influenced by what they have driven as a member.”

In the past, Mr. Ford said, his company did not have the right models to attract college-age drivers.

“The Focus is the right product at the right time to reach college kids,” he said. “We don’t know where car-sharing is headed, but Ford wants to be a part of it.”

Article source: http://feeds.nytimes.com/click.phdo?i=1d5c4373d607bf87b40af64a7b5844c3

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Ford and Toyota to Work Together on Hybrid Trucks

August 22, 2011 by Leave a Comment

DEARBORN, Mich. — Ford Motor Company and Toyota Motor said Monday that they would jointly develop a gas-electric hybrid fuel system for pickup trucks and sport utility vehicles aimed at keeping larger models affordable as the automakers work to meet stricter fuel-economy standards.

The companies said they did not plan to collaborate on developing the vehicles themselves, instead using the hybrid system they develop to power separate models under the Ford and Toyota brands. The resulting hybrid trucks would go on sale later this decade, they said, without providing a more specific timeframe.

“Clearly Ford and Toyota will remain competitors,” said Derrick Kuzak, Ford’s group vice president for research and development. “By working together, we will be able to offer our customers more affordable technology sooner.”

In addition, Ford and Toyota said they intended to collaboratively develop new technology for information and entertainment systems in vehicles, with the goal of offering more Internet-based services and useful data to drivers. The companies already are among the industry’s leaders in this area, known as telematics, and their partnership could give them enough leverage to essentially dictate the standards that other automakers use to wirelessly connect mobile phones and other devices to vehicles.

The partnership sprang from informal talks between the chief executives of the two companies, Alan R. Mulally at Ford and Akio Toyoda at Toyota, that began when the two accidentally crossed paths at an airport, according to Takeshi Uchiyamada, Toyota’s executive vice president for research and development. Teams led by Mr. Kuzak and Mr. Uchiyamada began working together in April.

They said many specifics of the deal had yet to be determined. The companies signed a memorandum of understanding Monday and expect to enter into a formal agreement next year, after completing a feasibility study that will help them lay out more detailed plans.

Ford makes the top-selling truck in the United States, the F-150, and Toyota is the leading producer of hybrid vehicles, having sold 3.3 million since introducing the popular Prius car in 1997. Neither company sells a hybrid truck, and other automakers have had little success doing so.

But proposed fuel-economy standards, announced by the Environmental Protection Agency last month, that would require automakers to build dramatically more fuel-efficient vehicles in the years ahead are forcing them to explore more advanced technology. By collaborating, Ford and Toyota hope to reduce the costs and development time of such work and keep hybrid trucks from becoming too expensive or lacking in performance.

“The E.P.A. fuel standards are a big challenge for us automakers,” Mr. Uchiyamada said through a translator. “Trucks and S.U.V.’s are vehicles that the American society cannot do without. This collaboration we are forming with Ford is not only about lowering carbon dioxide but making light-duty trucks and S.U.V.’s more affordable.”

The hybrid system they plan to develop would be for rear-wheel-drive vehicles. The Toyota Prius and Ford’s hybrids, including the Fusion sedan and Escape small sport utility vehicle, are front-wheel drive.

Ford and Toyota have not worked together on product development efforts until now, though such partnerships are increasingly common in the industry. Ford is involved in joint development efforts on some transmissions with General Motors and on diesel powertrains in Europe with PSA Peugeot Citroën.

“This is the kind of collaborative effort that is required to address the big global challenges of energy independence and environmental sustainability,” Mr. Mulally said in a statement.

Article source: http://www.nytimes.com/2011/08/23/business/ford-and-toyota-to-work-together-on-hybrid-trucks.html?partner=rss&emc=rss

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