Shares of Ford Motor Co. (F.N: Quote, Profile , Research) rose to their highest in three weeks on Wednesday on hopes that a meeting between its CEO and the chairman of Toyota Motor Corp.(7203.T: Quote, NEWS , Research) would eventually lead to cost-savings.

Analysts discounted the prospect of a near-term alliance, while Toyota, which confirmed the meeting, said no deal was on the agenda in discussions between Alan Mulally and Fujio Cho.

But Ford shares rose on the prospect that the company, which is struggling to turn around its loss-making U.S. operations, might clinch a cost-saving partnership with Toyota in areas such as technology development or parts purchasing.

Ford stock was up 10 cents, or about 1.3 percent, at $7.59 on the New York Stock Exchange after being up 2 percent.

"At this point, Ford needs to be focused on North America," said Mark Oline, corporate finance analyst with Fitch Ratings.

"Longer term, across the industry, we see the prospect for alliances of different forms taking shape."

Oline said any Ford tie-up with Toyota would likely be more limited in scope than the broad tie-up that General Motors Corp (GM.N: Quote, Profile , Research) rejected earlier this year with Nissan-Renault

The Japanese business daily Nihon Keizai Shimbun first reported that Mulally and Cho had met last week and called it the first step in potential partnership negotiations.

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

A Ford spokesman declined comment. Toyota spokesman Tomomi Imai said last week's event was "just a get-acquainted" meeting, adding that Toyota's top executives routinely meet with their counterparts at other automakers.

Even before news of the meeting with Toyota, Wall Street analysts had been growing cautiously optimistic about Ford's turnaround prospects.

Merrill Lynch analyst John Murphy raised his rating on Ford stock from "sell" to "neutral," citing its newly raised automotive liquidity of $48.3 billion, up from $23.6 billion at end September.

Morgan Stanley analyst Jonathan Steinmetz raised his rating on Ford to "overweight" from "equal-weight" earlier this month on the company's increased liquidity and Mulally's leadership.

Since Mulally took over from Ford family scion Bill Ford Jr. in October, it has streamlined management, appointed a global product development chief and raised about $25 billion in cash through liens, bond offerings and credit lines.

Analysts said it was less clear what Toyota would gain through any partnership with Ford, given its run of recent sales success and its lead in areas such as hybrid technology.

Toyota is poised to overtake General Motors Corp. (GM.N: Quote, Profile , Research) 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 almost 13 percent this year, Ford's sales have fallen almost 8 percent, according to monthly sales data.

Toyota shares closed 1.9 percent higher in Tokyo.