In a move that signals the direction of two of the world’s largest and most engineering-driven automakers, Toyota and BMW have signed a memorandum of understanding that will guide their relationship and address the changing landscape of the auto industry in the mid to long term.
The agreement defines how the two companies will collaborate on next-generation environmentally friendly technologies. The two companies have agreed to work together in researching the lithium-ion battery technologies used in electric vehicles – an especially relevant item because Toyota has yet to offer an all-electric car to consumers. The two companies also added that they will explore other technological issues upon which to collaborate.
In addition, Toyota Motor Europe (TME), Toyota’s European subsidiary, and BMW have entered into a contract under which BMW Group is to supply 1.6 liter and 2.0 liter diesel engines to TME starting in 2014. The engines will be installed in certain Toyota-produced vehicles planned for sale in the European market. Through this agreement, Japan’s leading automaker plans to expand its European lineup and sales of fuel-efficient, low CO2-emission diesel-powered vehicles. In Europe, diesel engines power more than half of all autos sold.
This agreement comes as automakers are challenged to meet tightening fuel efficiency standards around the globe. In addition, the collaboration addresses ever-climbing research and development costs that come as electric, fuel cell and alternative fuel technology evolves. This Euro/Asian meeting of the minds comes close on the heels of other automaker collaborations, including one between Nissan and Daimler and Daimler and China-based BYD.