BMW, the world’s largest maker of luxury vehicles, will supply Toyota Motor Corp with 1.6 liter and 2 liter diesel engines for the Japanese company’s models in Europe starting in 2014, the automakers said in a statement in Tokyo yesterday. The two carmakers also agreed to jointly research next-generation lithium-ion battery technologies, according to the statement.
For Toyota, the agreement allows Asia’s largest carmaker to expand its European lineup of diesel-powered vehicles. For BMW, the partnership paves the way for the company to team up with the biggest producer of hybrid vehicles.
“It is positive for BMW to expand its range of partners among mass-market carmakers,” said Daniel Schwarz, an analyst with Commerzbank in Frankfurt. “One of the problems for premium manufacturers is generating scale for environmental technology, and this will help.”
Toyota, which counted Europe for 12 percent of its volume sales last fiscal year, and Ford Motor Co, in August announced a plan to jointly develop a hybrid system for pickup trucks and sport-utility vehicles as US fuel-economy rules tighten.
Toyota is also working with US electric-car maker Tesla Motors Inc on a battery-powered version of the Toyota RAV4 sport-utility vehicle that will go on sale next year.
BMW cooperates with PSA Peugeot Citroen, Europe’s second--largest carmaker, on hybrid technology and engines for the Mini brand.