The chairman of Toyota Motor Corp. (TM) met with the chief executive of Ford Motor Co. (F) but they did not discuss the possibility of forming any alliance, Japan's top auto maker said on Wednesday.

"It was just a get-acquainted meeting," Toyota spokesman Tomomi Imai said, adding Toyota's top executives constantly meet with counterparts at other auto makers.

Japanese business daily Nihon Keizai Shimbun reported on Wednesday that Ford CEO Alan Mulally and Toyota Chairman Fujio Cho met last week in Tokyo as the first step in potential partnership negotiations.

The meeting was also attended by Ford Executive Vice President Mark Fields, who is in charge of restructuring the auto maker's loss-making North American operations, the paper said.

Mulally may visit Japan again in January to meet with Toyota executives, the report also said.

The newspaper cited unnamed sources familiar with the talks as saying Ford was interested in Toyota's hybrid and fuel-cell technologies as well as its work in reducing manufacturing and parts procurement costs.

"I can't confirm or deny the report other than to say that we have discussions with participants in our industry all the time," Ford spokesman Oscar Suris said.

Ford shares closed up 7 cents, or nearly 1 percent, at $7.49 on the New York Stock Exchange on Tuesday.

Toyota shares rose more than 2.5 percent to a record 7,980 yen, in line with gains in other top Japanese auto makers' shares as the dollar held near a two-month high against the yen.


Analysts were skeptical that Toyota and Ford would agree to an outright merger or a substantial joint investment given the diverging paths for the two auto makers.

"I don't think you're looking at any kind of alliance here," IRN Inc. analyst Erich Merkle said. "You have to ask yourself what would be in it for Toyota. They're doing pretty well on their own."

Toyota is poised to overtake General Motors Corp. (GM) as the world's largest automaker in terms of production next year, and many analysts expect it will also unseat Ford as No. 2 in the U.S. market as soon as next year.

While Toyota's U.S. sales have jumped by almost 13 percent this year, Ford's have fallen by almost 8 percent.

The Nihon Keizai said Toyota could be considering a partnership as a way to ease potential friction with the U.S. auto industry at a time when its own growth — as well as exports from Japan — has been surging.

"As part of its strategy, Toyota is sweeping across the U.S. market. This could be a countermeasure to avert potential criticism," said Katsuhiko Kodama, senior strategist at Toyo Securities.

Mulally, who took over as Ford CEO in October with a mandate to turn the struggling company around, has spoken repeatedly about his admiration for Toyota, a company he said he studied closely as a manufacturing executive at Boeing (BA) Co.

Ford currently licenses part of Toyota's market-leading hybrid engine technology for the gasoline-electric versions of its Escape and Mariner sport utility vehicles.

Ford, which has relied heavily on its line-up of trucks and SUVs, would stand to gain from a cooperative partnership with Toyota if it focused on fuel economy and other technology seen as environmentally friendly, said Edmunds.com analyst Jesse Toprak.

In terms of long-term planning, I think it's very smart for Ford to be looking at this," Toprak said. "This is going to be a factor that will determine whether an auto maker is successful in the future."

Efraim Levy, an equity analyst at Standard & Poor's, agreed.

"Toyota could teach Ford a lot in any kind of joint venture (such as) suggestions on improving manufacturing efficiencies or sharing technologies," he said. "The benefits that would accrue to Toyota are less obvious."

He added: "I don't think any major transaction is going to occur between them. It's probably just going to be technology sharing."

The possible partnership is the latest of several that have captured headlines for the global auto industry in recent months.

GM declined to enter an alliance with Nissan-Renault in early October after three months of talks, triggering speculation the French-Japanese auto group could turn to Ford to secure a North American partner.

Carlos Ghosn, who heads both Renault SA and Nissan Motor Co. , said last month he was open to adding a U.S. automaker to form a three-way alliance, but said the timing was not right for Nissan.