[8] Bmw Toyota At This Month Topic

TOKYO— Toyota Motor Corp. and BMW AG said Thursday they have forged a partnership in which the two will conduct joint battery research for next-generation green cars and BMW will supply diesel engines to Toyota.

"We think that this collaboration will allow for development of next-generation batteries to be done faster and to a higher level," Takeshi Uchiyamada said at a press conference in Tokyo. In addition to the research on lithium-ion batteries, the two car makers will discuss other possible environmental-technology projects.

On paper, the deal offers both partners the potential for significant benefits. It gives BMW a low-risk role in battery development with the world leader in hybrid engines while filling a hole in Toyota's power-train lineup with a diesel technology that's highly regarded in the industry. The Japanese car maker will use the 1.6- and 2-liter engines from BMW starting in 2014 in cars sold in Europe, where diesel-powered vehicles make up more than half of the market.

The deal will also reduce BMW's engine-production costs per unit by increasing volume. Though a market leader in the premium segment, BMW lacks the economies of scale of mass-market auto makers like Volkswagen AG or General Motors Co. , so teaming up with a player of Toyota's scale makes sense. The companies have yet to settle on such details as the number of engines to be supplied and the Toyota models they'll be installed in.

This is the first engine procurement from a competitor for Toyota, which boasts of its power-train range, from combustion engines to hybrid and fuel-cell systems. In an earlier collaboration, Toyota supplied BMW with a 1.6-liter diesel engine for its Mini between 2002 and 2005.