In an historic deal, rival motor vehicle manufacturers Ford and Toyota will jointly develop a new, gas-electric hybrid powertrain system for use in rear-wheel-drive light trucks and SUVs.
Both companies have announced they will make more fuel-efficient pickup trucks and sport-utility vehicles as the US heads toward stricter emissions standards.
Cost and depth of the co-development, such as how many engineers from each company will be assigned to work on development, has yet to be determined.
This is the first time the pair have agreed to collaborate on product development.
Both already have hybrid systems that power front-wheel-drive passenger cars such as the Ford Fusion and the Toyota Prius, the world’s top-selling hybrid.
"The EPA [Environmental Protection Agency] requirements are a big challenge for us auto makers," said Toyota research and development chief Takeshi Uchiyamada.
"American society can't do without trucks and SUVs. This collaboration we are forming with Ford is not only about lowering carbon dioxide but making truck and SUVs more affordable for the customer."
The two other US-based companies, General Motors and Chrysler Group, already have developed a hybrid system for larger rear-wheel-drive vehicles, though it remains an expensive option.
Ford and Toyota embarked on the co-operation deal after their two chief execttives met informally at an airport earlier this year.
Toyota and Ford product-development chiefs then began discussing areas where the companies could work together and the idea of cooperating on rear-wheel-drive hybrids came up.
In May 2010, Toyota took a small ownership stake in Tesla Motors, an electric-car company that is building the powertrain to be used in an all-electric RAV4 due out next year from a new production plant in Canada.