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Last Updated: Wednesday, 2 November 2005, 09:15 GMT
GM and Toyota said to hold talks
By Jonathan Head
BBC News Tokyo correspondent

GM Hummer ambulance
The General needs urgent attention
The chiefs of the world's two largest car makers, Toyota and General Motors (GM), are reported to be meeting in Tokyo to discuss co-operation efforts.

Neither company will confirm the meeting, but GM chairman Rick Wagoner, has been in Japan since Monday.

Toyota is the world's most profitable car maker, while GM is losing billions of dollars.

Toyota might help GM in order to avoid a public backlash against Japanese cars in the crucial US market.

Co-operate rather than compete

Toyota's astonishing success in selling cars around the world, and making money out of them, is beginning to worry its bosses.

Toyota pick-up truck
Toyota is doing well in the US

Toyota makes most of its profits selling cars in the US, and it is concerned that it could provoke anti-Japanese feeling there.

Some Congressmen have complained that the Japanese yen is being kept artificially weak against the dollar.

So Toyota is looking for ways to co-operate with rather than compete against GM.

Both GM and its rival Ford, the two biggest US manufacturers, are in dire financial straits, burdened by welfare and pension commitments, that there are real fears over their survival.

Fresh figures show that while US car sales fell 14% in October, Toyota and Honda gained market share while GM and Ford slipped back.

Helping each other

In May, Toyota and GM discussed developing hydrogen technology together as an alternative fuel.

Toyota is already the leading manufacturer of so-called hybrid cars, using a combination of electric and petrol power.

Toyota also stepped in last month to buy shares in a smaller Japanese manufacturer from GM, a move which could help its American rival's bottom line.

The latest meeting between the heads of the two companies is shrouded in secrecy, though according to the Kyodo News agency, Toyota President Katsuaki Watanabe and Mr Wagoner are discussing co-operation with regards to technological research and plans for jointly operated factories.

It is becoming increasingly clear that whereas on paper, Toyota and General Motors seem locked in a titanic battle to determine who will dominate the global car market, in practice they are actually helping each other out.

The idea that they no longer want to compete in all areas is no longer a secret.


SEE ALSO:
GM and Ford continue losing sales
01 Nov 05 |  Business
Toyota 'could outstrip GM output'
26 Oct 05 |  Business
US car firms lose out to rivals
03 May 05 |  Business


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