BMW and Toyota join forces

TOYOTA and BMW have entered into a collaboration that will give the Japanese giant access to new ‘clean’ diesel engines for its European models in return for providing the German brand with access to its hybrid and other fuel-saving technology.

At a joint press conference in Tokyo overnight, BMW Group and Toyota Motor Corporation announced they had signed a memorandum of understanding concerning “a mid-to-long-term collaboration on next-generation environment-friendly technologies”.

Under the MOU, the two companies have agreed on collaborative research in the field of next-generation lithium-ion battery technologies.

They have also agreed to “identify and discuss other possible collaborative projects”.

Starting in 2014, BMW will supply Toyota with much-needed new fuel-efficient, low-emissions 1.6-litre and 2.0-litre diesel engines for the European market.

Toyota has never been strong on passenger car diesels because its major markets of Japan and the United States have traditionally had a low diesel-engine uptake, but in Europe diesel-engined cars account for more than half of new-vehicle sales.

And while BMW has long shunned hybrids as merely a ‘stop-gap’ technology, it appears to have conceded they are now required to meet market expectations and lower the performance-focused brand’s overall consumption levels.

The Bavarian car-maker also has a joint-venture in place with Peugeot-Citroen for petrol-electric hybrid technology, which is understood to be unaffected by the Toyota deal.

Toyota has been developing lithium-ion batteries for its hybrid (and forthcoming full-electric) cars with its electronics partner, Panasonic, but is looking for a battery technology breakthrough.

“This collaboration will allow for the development of the next-generation battery faster and at a higher level,” Toyota executive vice-president Takeshi Uchiyamada told reporters at the Tokyo news conference.

BMW AG chairman Norbert Reithofer described Toyota – which has sold around 3.4 million hybrids worldwide – as the leading provider of environmentally friendly production technology in the volume segment.

“We are now joining forces to further develop environment-friendly technologies and to expand our innovation leadership in each of our segments,” said Mr Reithofer, who was not present at the announcement.

“Supplying Toyota with our fuel-efficient and dynamic diesel engines represents another important step in the planned expansion of our sales activities for engines and powertrain systems.” Supplying large numbers of engines to Toyota will give BMW greater economies of scale and bring down the unit cost of its diesel engines.

TMC president Akio Toyoda, who was also absent, said in a statement: “It is a great joy and a thrill to enter into this mid-to-long-term collaborative relationship with BMW, a company with its own culture and history from its many years of car manufacturing in Europe, and a company that makes cars that are fun to drive.

“In the spirit of contributing to furthering the development of the auto industry and society, both companies will bring their wide-ranging knowledge – starting with that concerning environmental technologies – to the table and make ever-better cars,” he said.

Toyota Motor Europe representatives said the BMW diesel engines would be installed in certain Toyota-produced vehicles planned for sale in the European market.

“Through this agreement, Toyota plans to expand its European line-up and sales of fuel-efficient, low CO2-emission diesel-powered vehicles,” said TME.