Toyota plans to share engine technology with rivals

December 19, 2016

Toyota is to open up its powertrain technology to rivals in order to control massively escalating development costs, in a move that could speed up the industry’s shift to low-emission vehicles.  

As ‘one size fits all’ powertrain modules – engines, transmissions and other drive components – become a reality, due to increasing dependence on flexible computerised components, Toyota sees a way to alleviate its heavy research and development (R&D) costs. These costs have risen by 73% since 2010 to an eye-watering $9 billion (€8.6 billion) last year. Toyota’s main competitor Volkswagen has seen its R&D budget more than double over the same period.  

This is a major departure for Toyota, that, like many Japanese companies, has maintained a tightly-knit network of suppliers, in a bid to develop exclusive technology and retain a competitive edge over rivals.  

If we take a component developed with Toyota and sell a million to Toyota and another million to other customers, it would double our return on our development costs, said Yoshifumi Kato, executive director of engineering R&D at Toyota’s biggest supplier Denso.  

Until now, we couldn't sell the same inverter used in Toyota's previous hybrid system to other customers because it wouldn't fit the motor, or the voltage was different,’ he added.  

We can avoid this issue if suppliers can sell the entire system.  

This is a long-awaited, sensible development from Toyota. It will allow the company to justify maintaining ever-increasing development budgets as the carmaker accelerated projects as the policy pressures to cut emissions ever further and invest heavily in long-range electric vehicles. It is a bonus for other manufacturers too, who will be able to keep their own development and procurement costs down by sourcing them off-the-shelf from Toyota. 

The news follows Toyota’s announcement last week that it would expand its petrol hybrid technology development programme with further investment.

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