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BMW and Toyota to share engines

Date: 12 December 2011

BMW and Toyota have signed an agreement to share engines and environmentally friendly technology.

BMW is to supply Toyota's European division with its 1.6- and 2.0-litre diesel engines from 2014, and the companies have agreed to collaborate on research for the next generation of lithium-ion batteries.

The firms have also agreed to discuss future collaborations on other relevant projects, and while an exact timeframe has not been confirmed, the project has been described as mid-to-long-term.

The agreement allows BMW to capitalise on economies of scale by building and supplying more of its diesel engines to Toyota, which has historically struggled to be competitive with diesel. The German firm has two production hybrids in the pipeline - the 3-series and the 5-series - that are due to arrive in the UK in 2012, but it lacks Toyota's long-term expertise with hybrid drivetrains.