NEW YORK ( TheStreet) -- The alliance between automakers Toyota (TM) and comparatively tiny Mazda (MZDAF) announced last week in Japan lacked a formal commitment beyond the handshake of chief executives, such as an exchange of equity. It did, however, speak to the need for automakers to form such alliances to control the rising costs of research and development.
The fruits of the relationship may be hard to measure, at least for awhile. In time, Toyota -- the biggest and richest of the world's automakers -- may decide that Mazda has too little to offer or that it might be worth a bear hug. But clearly, small automakers like Mazda must pursue alliances to survive in a world dominated by giants.
Mazda, which spends about a tenth of what Toyota spends annually on research and development, is under pressure to offer advanced environmental and safety technologies such as fuel-cell engines that run on hydrogen, as well as autonomous systems that increasingly will take over for drivers. Toyota is among the R&D leaders, so it can share with little additional cost.
The originality and flair found in many Mazda vehicles, which are prized by automotive enthusiasts and cognoscenti, may be what Toyota covets. When Akio Toyoda took over the CEO position in 2009, he vowed that his company would develop more stirring, visually stimulating models, a response to the mass-market Toyota Corollas and Camrys that turned big profits for their soundness and reliability but attracted criticisms of blandness from reviewers.