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BMW and Toyota announce diesel and hybrid collaboration

BMW and Toyota have signed a new technology agreement which will see the German brand provide 1.6-litre and 2.0-litre diesel engines for models in Europe.

The deal will also see both companies working together to develop next-generation lithium-ion battery technologies for hybrid cars.

Although details of which models will receive the diesel engines have not been revealed, it is likely that among the first will be the Avensis and Auris models built at Toyota's factory in Burnaston, Derbyshire.

Didier Leroy, president and chief executive officer of Toyota Motor Europe, said: "Engineering work has already begun and we will start taking supply from BMW from 2014.

“I can't say which models yet, but we will focus first on vehicles built locally in Europe."

TME also has a car plant in Valenciennes, France, which assembles the Yaris. Leroy added that the two companies have been working on putting the deal together since April this year.

The move will help Toyota meet EU diesel emissions targets and it currently does not have a 1.6-litre diesel in its line-up.

BMW's product development chief Klaus Draeger said that this is the first time the German carmaker has worked with a Japanese vehicle manufacturer.

Toyota executive vice president Takeshi Uchiyamada added: "Whoever produces the best battery technology in terms of cost, quality and functionality will win the most customers. This agreement will allow us to produce next generation batteries faster and to a higher level."

The two companies said that there are no current plans to expand the collaboration into joint shareholdings.

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