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Toyota and BMW announce joint venture on Diesel Engines and Battery Technology

Toyota and BMW will be collaborating on battery technology and engines. This was announced in a joint press conference by the two auto makers in the second day of meeting the press at the Tokyo Motor Show. Environmentally friendly technologies will be the key parameter that will be incorporated in the long term collaboration between the two companies.

Akio Toyoda, President, Toyota expressed happiness and thrill on this collaboration with BMW, who he described as the manufacturing company that was the most sustainable and innovative when it came to the premium-car segment. His counterpart, The CEO of BMW, Norbert Reithofer gave Toyota the credit for being one of the leaders in providing environment-friendly vehicular technology and that too in segments that required mass volumes to be produced.

Toyota and BMW announce joint venture on Diesel Engines and Battery Technology

A driving force behind this deal was the desire of BMW to use the vast experience Toyota has in the field of automotive batteries. Executive Vice President of Toyota, Takeshi Uchiyamada stated that BMW had shown interest about the battery technology of Toyota. In lines with the agreement signed, the two auto manufacturers would start basic research for accelerating the process of developing cheaper as well as technologically advanced battery cells of lithium-ion. BMW, on its part, would share its diesel engine portfolio with Toyota. Toyota has its self-developed 1.4L, 2.0L and 2.2L diesel engines that are used in Avensis, Auris and the European Auris models. However, the 2.0L four-cylinder and the 1.6L diesel engines from BMW have been rated to be much better and more sophisticated. The best part of this deal is that it will help BMW achieve significant economies of scale whereas Toyota would be able to focus more on battery development and its hybrids, as it would be able to reduce operations on developing diesel engines.

Toyota cars will start coming with BMW engines from 2014; however the same will be restricted to “localized productions.” As the Lexus is not manufactured in Europe, BMW does not need to worry that directly competing products of the two companies will be selling in the same markets. The Lexus IS220d has traditionally been slow selling and hence, newer models of this vehicle with diesel engines are unlikely at least in the immediate future. In the present context, diesel models of BMW are not going to be placed in the US Market, where Toyota or Lexus operates. However, this possibility is not completely ruled out if the demand and efficiency for diesel-operated cars increase.

Toyota and BMW announce joint venture on Diesel Engines and Battery Technology

BMW would be more than happy to increase the scope of this deal. Traditionally, it has been a seller of power engines to a lot of automakers; this was not just restricted to supercars like McLaren F1 but included simpler vehicles like the Opel Omega. The deal with Toyota is justified for BMW because it has encompassed a financially strong global car maker. Other similar deals by BMW in recent times have been restricted to boutique cars, with some of them flopping outright. However, it is hoped that the deal with Toyota has a better chance of being a success as the CEO of BMW himself said that the deal was a key step in expanding their planned sales for their engines as well as powertrain systems.

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