Toyota, BMW sign agreement on environmental technologies

Toyota Motor Corp and BMW AG today signed an agreement to jointly work on a broad range of environmental technologies. The agreement will see the two engineering companies forge a partnership in the increasingly competitive auto industry.

The agreement envisages the two firms working together on lithium-ion battery research, a key technology in the development of electric cars. The German premium brand will also supply 1.6 litre and 2.0 litre diesel engines to Toyota starting 2014 in Europe. The two auto majors would also seek to identify possibilities for other projects.

The deal, announced at a news conference in Tokyo, comes in the backdrop of rising research and development costs for meeting stringent emissions and fuel-economy standards around the world.

Analysts say carmakers would also need to meet varying preferences of consumers for vehicle power trains across different regions.

"Fundamentally we are both engineering companies, so in many aspects we have found we speak the same language," Toyota Motor Europe president and CEO Didier Leroy told the news conference.

"It is interesting to see what can be achieved when Japanese engineering meets European engineering and when the cooperation really works," he said.