TOKYO ― The “odd couple” of the Japanese auto industry ― Toyota and Mazda ― recently announced they were planning to forge even closer ties.

At a press conference a few weeks ago, the heads of the two firms ― Japan’s largest carmaker and one of its smallest ― announced they had agreed to further expand their already close relationship.

But the top executives were careful to indicate that it was “more of an engagement,” than a wedding, as no financial transactions were involved.

Despite their attempts to downplay the move, the latest show of affection between the two sparked some serious speculation that they may be steadily marching toward a merger. 

“It certainly could be a possibility, given the current auto landscape in Japan, which is all about cutting costs and combining technologies,” said one industry watcher, declining to be identified.

He added that even in such a case, Mazda, as one of the smaller but most beloved carmakers in Japan, noted for its powertrain and unique design philosophy, would retain its brand name and identity.

“Mazda won’t let go of its legacy that easily, especially since it knows it has certain strengths that its rivals want.”

Further adding to the speculation, Renault-Nissan Alliance chairman Carlos Ghosn, who knows a thing or two about mergers, noted that it made perfect sense for Toyota and Mazda to widen their cooperation further in the future.

He called their latest decision to upgrade their partnership, “logical and natural.”

The fact that Toyota and Mazda have yet to actually define the exact nature of their recent deal is also adding fuel to the rumors.

“Details will be released at the appropriate time once decisions have been made,” was the official reply from Toyota.

Some industry experts said, it was almost as if they were in too much of a hurry to announce that their significant other had been taken and they had not yet thought about the details.

Both Toyota and Mazda would be a “catch” for any carmaker in Japan.

Despite the recent slump Mazda has been experiencing, the brand is known for manufacturing top-notch engines and internationally popular compacts.

Toyota, on the other hand, is sometimes cited as boring and bland, but it is still nevertheless the most powerful car brand in Japan.

The company is also currently high on cash. In the quarter that ended this March, it reported a near 50 percent jump in its earnings despite its previous global recalls.

For the year, it reported new records in net income, operating profit and global revenue.

This was thanks to robust U.S. sales and a weak yen, triggered by a series of monetary easing measures undertaken by the Bank of Japan.

The Japanese currency Wednesday fell to its weakest against the U.S. dollar in almost 8 years.

Furthermore, there has been talk of a possible merger for several years in the related sectors, according to another source.

“Within the car industry, speculation has been rife for some time, given the highly collaborative nature of their relationship,” he said.

Toyota, one of the industry leaders in eco-friendly car technology, currently supplies Mazda with hybrid drivetrain technology. And Mazda is building a subcompact sedan equipped with its so-called “clean diesel” Skyactiv engines for Toyota’s Scion at its new plant in Mexico.

This means while the technology is Mazda, the badge will be Toyota’s.

By Kim Ji-hyun Korea Herald correspondent (jemmie@heraldcorp.com)