Not So Strange BedFellows

Recently Toyota announced that it is partnering with Mazda to produce subcompact cars in Mexico to serve the North American market. There’s been much speculation as to why Toyota would do that, from Mazda has a better cost structure to a united Japanese effort to create various model cars from a common base of parts.

It’s really as simple as partnering with someone when both can benefit. Most companies would never consider partnering with a competitor, benefit be damned! But that’s a tad short-sighted, don’t you think?

Toyota already has a production facility in Mexico, but it makes trucks. Sure, they could build a plant from the ground up, but Mazda already has a facility and a workforce that is underutilized. By working together, both companies profit.

Toyota worked with GM many years ago in the NUMMI plant in California. That hardly gave GM a competitive advantage, although if they had listened they could have avoided many subsequent problems.

Toyota is successful because it is not afraid to partner with others, even ones that appear on the outside to be strange bedfellows.

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