Toyota Weighs Possible Alliance with GM

Toyota is concerned about the political and social backlash that could result if GM falls apart, Business Week magazine said.

Published: 16-Jul-2006

Toyota Motor is considering proposing an alliance with General Motors to prevent its US rival from forming a three-way tie-up with Renault and Nissan, BusinessWeek magazine reported Saturday.

Citing 'people with knowledge of the Japanese auto maker's plans,' the magazine said Toyota had 'war-gamed' a proposal to assist struggling GM, the world's largest auto maker, and head off a deal that would create a monolithic automotive group.

'Toyota has no interest in seeing an alliance like this (linking Renault, Nissan and GM) take place,' an executive who asked not to be identified was quoted as saying.

The magazine said 'whether Toyota actually makes a bid remains to be seen.' It contacted several GM executives who said the company has heard nothing from Toyota. And Toyota spokesman Steven Curtis told BusinessWeek that any talk of an offer is 'pure speculation.'

The Japanese auto maker is wary of more than just the competition that would result from an alliance between GM, Renault and Nissan, whose chiefs met Friday in Detroit, Michigan, and agreed to conduct a 90-day joint review of a potential alliance.

Toyota is concerned about the political and social backlash that could result if GM falls apart, the magazine said.

However, an equity tie-up -- like that proposed by GM's largest private shareholder Kirk Kerkorian, would be unlikely, the magazine said, citing 'one source familiar with Toyota's strategy' who explained: 'It's not in their culture.'

Attempts by Agence France-Presse to contact GM and Toyota in the US for comment were not immediately successful.


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The dual-mode hybrid system will be available in a wide range of cars, trucks and S.U.V.'s made by the three companies, starting with the 2008 Chevrolet Tahoe that goes on sale in fall 2007.

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