BMW Group (BMW) and Toyota Motor Corporation (TMC) on Thursday (1 December) said they had signed a memorandum of understanding (MOU) concerning a mid-to-long-term collaboration on next-generation environment-friendly technologies.

Under the MOU, the two companies agreed to collaborate on research into next-generation lithium-ion batteries. They have also agreed to identify and discuss other possible collaborative projects.

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Meanwhile, Toyota Motor Europe (TME) and BMW have agreed a contract for BMW to supply 1.6- and two-litre diesel engines to TME starting in 2014. The engines will be installed in Toyota vehicles for sale in Europe.

“Through this agreement, Toyota plans to expand its European lineup and sales of fuel-efficient, low CO2-emission diesel-powered vehicles,” the automakers said.

Toyota has previously supplied a 1.4-litre diesel to BMW which used it in its first generation Mini along with a Chrysler Brazil-made petrol engine. BMW now buys Mini petrol engines from a PSA-Ford venture and makes the diesel unit itself.

BMW chairman Norbert Reithofer said: “Toyota is the leading provider of environment-friendly series technology in the volume segment and the BMW Group is the most innovative and sustainable manufacturer of premium automobiles.

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“We are now joining forces to further develop environment-friendly technologies and to expand our innovation leadership in each of our segments. Supplying Toyota with our fuel efficient and dynamic diesel engines represents another important step in the planned expansion of our sales activities for engines and powertrain systems.”

TMC president Akio Toyoda added: “It is a great joy and a thrill to enter into this mid-to-long-term collaborative relationship with BMW, a company with its own culture and history from its many years of car manufacturing in Europe, and a company that makes cars that are fun to drive.  In the spirit of contributing to furthering the development of the auto industry and society, both companies will bring their wide-ranging knowledge – starting with that concerning environmental technologies – to the table and make ever-better cars.”