Toyota Motor Corp. and Germany's BMW said Thursday they are teaming up in the field of hybrid vehicle technologies, aiming to speed up development and lower the costs of producing "green" vehicles amid a stricter regulatory environment.
Under the agreement, the two carmakers will carry out joint research into next-generation lithium-ion battery technologies, among other projects, they told a joint news conference in Tokyo.
BMW will also supply 1.6-liter and 2.0-liter diesel engines to Toyota's unit in Europe starting in 2014, which will help the Japanese automaker expand its lineup of low-emission vehicles in the region.
Further details about the deal remain to be discussed with BMW, Toyota Executive Vice President Takeshi Uchiyamada said.
The announcement comes at a time when technological development is becoming a crucial factor in the crowded automobile market, where U.S., European and other Asian carmakers are competing for sales. However, it is hard for a company to develop a wide range of technologies on its own, analysts said.
The link with BMW will boost Toyota's sales in Europe, experts said. But Kohei Takahashi, an auto analyst at J.P. Morgan, said the tie-up alone will not significantly up Toyota's profits in Europe.
"With the macro environment looking increasingly negative, and with fears that the European market may even contract, I think Toyota needs to take (other) immediate steps to improve its profits," Takahashi said.