Toyota (7203), Mazda (7261) Partnership – Facing Uncertainty Together
The press conference held by Toyota and Mazda on Friday August 4th, announcing a capital tie-up, was quite remarkable, in our view: While there was the usual outlining of the scope of the new partnership, with expected cost synergies, manufacturing projects etc., the main focus was on how the two automakers were going to face an uncertain future together. We would note, however, that this is a very different union from that of Nissan (7201) and Mitsubishi Motors (7211), in which Nissan is in full command, and striving to achieve major cost synergies as quickly as possible. Toyota and Mazda want to remain equal partners, hoping that some sort of friendly rivalry will be inspiring to both groups.
Toyota is concerned about new competitors (Google (GOOGL US), Apple (AAPL US) and Amazon (AMZN US)) entering the auto sector, the expected demise of the internal combustion engine (ICE) and the expected future prevalence of EVs increases the risk of cars turning into mere commodities. Toyota believes that a possible solution to this predicament is to build extraordinary cars – cars that are seen not as a means to get from A to B, but which are intrinsically desirable products. Mazda covers this aspect of the business very well, partly thanks to its outstanding Skyactiv technology.
Discussion Points
- Addressing future challenges
- Operational cooperation
- Skyactiv X
Toyota Motor is an automobile manufacturer. Co. is primarily engaged in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks and related parts and accessories throughout the world. Co. provides financing, vehicle and equipment leasing and certain other financial services primarily to its dealers and their customers to support the sales of vehicles and other products manufactured by Co. Co.'s principal business segments are automotive operations, financial services operations and other operations. Co. sells its vehicles in approximately 190 countries and regions, and markets for its automobiles in Japan, North America, Europe and Asia.
Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods.
PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries.
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