Toyota Seeks Engine Alliance With Yamaha.

Toyota, due to enter Formula One in the next two years, is expected today [Monday] to announce an alliance with Japanese rival Yamaha in a bid to strengthen its engine development programme.


Japanese sources report that Toyota will take a five per cent stake in Yamaha Motor from its parent company, Yamaha Corp, worth approximately $93million, in its quest to enter the grand prix scene in a competitive state. The equity stake was less expected by experts than the scheduled announcement of a tie-up between two of Japan's biggest firms, which the auto industry had already predicted following Toyota's declaration of an F1 entry from 2002.


Both sides stand to gain from the agreement, with Yamaha being able to bolster its unsteady finances and obtain a better distribution network for its motorcycles, and Toyota gaining not only technological expertise but, it hopes, also the youthful image portrayed by its new partner. Both companies saw their stock prices rise on the trading floor as a result of the impending announcement.


"The scope for co-operation is reasonably broad, with Yamaha being the main beneficiary," said Stephen Usher, auto analyst at Jardine Fleming Securities, "It's certainly not bad for them ....... to have a deep pockets partner like Toyota."


Yamaha's last involvement in F1 saw it powering Damon Hill's Arrows in 1997, having previously teamed up with Brabham, Tyrrell and Zakspeed.