Toyota and Ford are to work together to develop hybrid rear-wheel-drive vehicles.
Takeshi Uchiyamada – who led the Toyota team of engineers that developed the Prius – and Derrick Kuzak, Ford’s product development chief, said those vehicles would be ready for the market by the end of the decade.
Ford will also help the Japanese develop on-board navigation and entertainment systems for their cars.
Toyota has sold nearly 3.3 million hybrids since 1997 and Ford is a leader in rear-wheel-drive pickup trucks.
The tie-up also comes at a time when Toyota faces tougher competition in the United States, its most important market.
It had risen to No. 2 in sales behind only General Motors in the US market, but has since fallen behind Ford.
The Japanese carmaker has been struggling to restore sales momentum in the US after the March earthquake in Japan forced production disruptions.
Ford’s US sales rose 12 percent in the first seven months of 2011.