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Subaru BRZ concept car

As in any industry, the automotive field is filled with examples of business partnerships among competitors—some successful, others decidedly less so. The nature of these relationships can range from a full-on merger to the simple sharing of technology; history has taught us that the former is a significantly greater challenge.

In the late 1990s, a consolidation craze was sweeping the automotive world. Daimler-Benz famously merged with the Chrysler Corporation in 1998, a relationship that yielded some minor successes over a nine-year period, but failed to produce the synergies needed to justify its continuation.

On the other side of the ledger, the Renault-Nissan tie-up, which began in 1999, has gone the distance thus far. Contrary to popular belief, though, this is not a merger, but rather a strategic partnership between the French and Japanese manufacturer. This unique arrangement has been a marriage of equals, Renault-Nissan Alliance Chairman and CEO Carlos Ghosn contends, and the reason why it has proven successful.

In fact, the automotive industry is rife with unique arrangements of all stripes, including some that seem to defy conventional wisdom. Exhibit A: This year, the general public will be introduced to the 2012 Scion FR-S, a brand new sports coupe that bears more than a passing resemblance to the brand new 2012 Subaru BRZ. The reason for the similarity: It's the same car.

While competitors are known to share production facilities, partner on vehicle platforms, and swap powerplants and company stock, it's still relatively rare that they work together in designing, engineering and building a vehicle from the ground up. But if you look below the sleek surface of the FR-S/BRZ, the reasons for this project soon become clear.

"Typically, car companies have areas where they are very strong and they have a lot of volume," reports Xavier Mosquet, senior partner and leader of the Boston Consulting Group's global automotive practice. "But in areas where they're less strong or with products where it's important for the image but not the revenue, they look for partners with more skill or more scale to help reduce development costs."

He goes on to cite the example of Toyota partnering with the PSA Peugeot Citroen concern in 2005. This joint venture yielded a factory in the Czech Republic, which produces a trio of subcompact cars for the European market, the Citroën C1, Peugeot 107 and Toyota Aygo. "All [these cars]gained significant market share," Mr. Mosquet notes. "But the 70 per cent of the car that was shared was not that visible to the customer."

This may be the caveat, then. While the average customer likely doesn't care if car companies are partnering in order to reduce production costs, they likely would care if their Cadillac is just a Chevrolet with a Cadillac badge—and the price tag to match.

One recent real-world example highlights the potential downside. The Volkswagen Routan, built by the Chrysler Group, is a thinly disguised clone of the Dodge Grand Caravan/Chrysler Town & Country minivans. The Routan debuted to lukewarm sales response in 2008 and has yet to rebound significantly.

But the FR-S/BRZ example is not a simple case of badge engineering; rather, it seems to be a concerted effort to boost the image of both brands with a vibrant new entry in the sports coupe segment. And, on paper, the business case is a strong one.

In 2008, Toyota increased its stake in Fuji Heavy Industries, parent company of Subaru, to 16.5 per cent. Since the demise of the Toyota Celica (in 2006) and the Toyota Supra (in 2002), the brand had become synonymous with front-wheel-drive cars that favoured economy and reliability over excitement. Even their Scion brand, which is marketed in North America to Generation Y, consisted entirely of cars built on Toyota front-wheel-drive platforms.

For their part, Subaru is a niche brand with a loyal following. While their market share in North America has crept up over the years, they are still best known for the symmetrical all-wheel-drive system, the horizontally opposed boxer engine and quirky styling. Long story short, there was room for another type of car to help drive traffic to Subaru showrooms.

"Toyota looked at what we do really well on the engineering side and wondered if we could leverage that advantage together," explains Ted Lalka, vice-president of product planning and marketing for Subaru Canada, Inc. "If we used our technology and then instilled some creative design work from Toyota, could we develop a sports car that really hit the mark?"

A statement issued through the offices of Toyota Canada Inc. echoed this sentiment: "By uniting the strengths of both companies, we hoped to bring about a synergy in which the sum of the parts is greater than the whole, and [to]offer an exciting new sports car to our customers."

The project began with the creation of the Toyota FT-86 concept car in 2009. This concept adopted the styling cues from an earlier design exercise and placed them atop a modified Subaru Impreza platform. From there, things moved quickly.

The all-wheel-drive configuration was switched to rear-wheel-drive. The 4-cylinder boxer engine was replaced with a new engine of similar layout, but with internal refinements from Toyota. The car went through a few more conceptualized iterations. Then, at the 2011 Toyota Motor Show this past November, it debuted in production form.

By all accounts, the FR-S/BRZ holds great promise for both Scion and Subaru. The formula for this new model certainly seems inspired: an inexpensive, lightweight, rear-wheel-drive sports car with a very low centre of gravity.

Special to The Globe and Mail