Toyota-Subaru Coziness Could Yield Retro-Corolla, Celica
April 16, 2008

By Bill Visnic and Peter Nunn

Normally stolid Toyota Motor Corp. hasn’t been shy in doubling of its stake in Fuji Heavy Industries Ltd. and openly admitting the two will jointly develop new vehicles – including an all-new rear-wheel drive sport coupe on a dedicated platform.

Whew. Quite un-Toyotalike. This is the company that rarely “buys” anything or anybody, preferring joint ventures, particularly when it comes to vehicle development and vital components. When it decided to build cars with General Motors, Toyota bought nothing; it established New United Motors Manufacturing Inc. (NUMMI) in California, which jointly makes vehicles for Toyota and GM.

When diesel engines began to take the European market by storm and it had no diesels, Toyota forgot about pride and expeditiously made deals to buy diesels until it developed its own.

So doubling its Fuji share to 16.5 percent and quickly announcing the two will sell the new sport coupe (powered by Subaru’s signature horizontally opposed boxer engine) sometime beginning around 2011 seems like an almost rash string of actions for Toyota. And what could practically obscure Subaru possibly offer global powerhouse Toyota?

It’s certain there’s some type of method to Toyota’s madness. The promise of a boxer-engined rear-drive compact coupe? Subaru probably couldn’t afford to develop and market such a low-volume proposition on its own, and for its home market, Toyota perhaps is titillated by the possibilities for a revival of the famed Corolla Sport (AE86), renowned for its zany oversteer and still a popular choice in tail-out “drifter” racing.

For the U.S., where the Celica (dropped in 2005) is Toyota’s more recognized coupe nameplate, the new Toyobaru coupe, if sold there, could recall the A20/35-series rear-drive Celicas, the 1970 first generation of the Celica nameplate.

But Toyota certainly doesn’t need Subaru to help it produce a new coupe. Likewise, Subaru loyalists might prefer not to have Toyota holding a Petri dish containing any Subaru genetic material.

Yet the notion of a 4-cylinder boxer engine driving the rear wheels of a tidily-sized coupe leveraging some of Toyota’s legendary development acumen is proposal not without its charms. Subaru gets a niche coupe it couldn’t do itself, Toyota gets a retro version of the original Celica to pit against the new Hyundai coupe and – in a perverse extension of the thought – maybe an answer to GM’s new-age Camaro.

In Japan, the rap on Toyota is that it no longer makes any interesting cars – thus the company’s likely interest in a new and presumably affordable coupe flaunting rear-wheel drive.

Subaru’s already confirmed it will sell the new coupe in the U.S.; Toyota almost certainly will. Given that, it’s even money Honda’s not far behind with a revisitation of the Prelude.

Yes, there’s talk of other products, such as a new compact car for Subaru, and tiny-car specialist Daihatsu, which already makes minis for Toyota, is in the car-developing and -sharing mix as well, so there could be implications for future Toyota Scion action. Meanwhile, Subaru has all but admitted it plans to eventually exit the 660-cc minicar segment in Japan, to focus resources on larger and more profitable endeavors.

But there must be something deeper going on here than low-volume sport coupes and compact cars.

With its increased ownership stake, Toyota may be buying a longer-lasting peek into Subaru’s research labs, where there may be sophisticated lithium-ion batteries and ultracapacitors (for hybrid-electric drivetrains) in a more mature state of development than Toyota enjoys access to from its own Keiretsu network, which, when it comes to such technology, we’re told is surprisingly limited in scope.

There could be manufacturing maneuvers here, as Toyota and several Japanese and Korean automakers are faced with increasing overcapacity in their U.S. factories, many of which are relatively new and exposed to a decaying U.S. domestic market. And Toyota may be keen to revive the Celica, but only in a venture that mitigates investment exposure in what historically is a fickle and low-volume segment.

And let’s not forget Subaru’s competence in all-wheel-drive systems. At one time, that was enough to interest GM. Toyota’s got its own AWD hardware, to be sure, but perhaps Subaru’s got an as-yet-unseen advance. So-called “torque-vectoring” AWD was pioneered by rival Honda Motor Co. Ltd. and is being introduced by Audi AG and BMW AG – Toyota could be seeking a quick entrée into some similar next generation of AWD.

But widen the perspective and the Toyota-Subaru connection is one that probably should worry competitors. It’s widely believed in Japan that Toyota appreciates Subaru’s place n the automotive cosmos and has tremendous respect for the tiny company and its engineering abilities. Toyota clearly sees unrealized profit potential in Subaru and the fact that they're Japanese companies working together means there are none of the cultural and time zone problems that helped make a flop of Subie’s now-defunct alliance with GM.

A flick of rubbed-off Subaru weirdness could do buttoned-up Toyota some serious good. And Toyota’s maybe just smart enough – smarter than former partner GM – to take the weirdness and run with it.

Photo by Toyota
2005 Toyota Celica GTS was the last year of the model.

Posted by Michelle Krebs at 4:22 AM under Commentary , Featured , Technology , Toyota | Comments (3) | digg this | Seed Newsvine