Bloomberg News

Toyota Seeks BMW Sports-Car Expertise in Technology Links

June 29, 2012

BMW and Toyota Extend Collaboration to Fuel Cells, Sports Cars

Toyota Motor Corp. vehicles at the company's logistics services inside the Port of Long Beach in California. Photographer: Tim Rue/Bloomberg

Toyota Motor Corp. (7203) said it will seek to gain from Bayerische Motoren Werke AG (BMW)’s expertise in sports cars as a partnership on new powering systems expands to include auto components and high-performance vehicles.

The carmakers will collaborate on developing fuel cells, lightweight materials and electric powertrains under a memorandum of understanding signed today, they said at a press conference at BMW’s Munich headquarters.

“BMW knows how to make a car perform,” Toyota President Akio Toyoda said at the briefing with Norbert Reithofer, the German company’s chief executive officer. Toyota’s strength in hybrid-powered models and fuel cells will help BMW, and “I am the one who is most looking forward to a sports car that is environmentally friendly,” Toyoda said.

BMW, the world’s biggest luxury carmaker, is already spending 530 million euros ($667 million) to develop the I sub- brand of electric cars to keep its worldwide sales lead over Volkswagen AG (VOW)’s Audi division and Daimler AG’s Mercedes-Benz. The BMW i3 electric compact and i8 hybrid supercar will go on sale in 2013 and 2014, respectively.

It’s too early to say whether the cooperation between BMW and its Toyota City, Japan-based partner will develop into any joint ventures, and any possibilities will be evaluated in coming months, Reithofer said.

Agreement Terms

Toyota is the world’s biggest maker of hybrid vehicles, which can operate on both electricity and gasoline or diesel fuel. It signed an agreement on Dec. 1 to work with BMW on boosting performance of lithium-ion batteries, which are used in hybrid or all-electric vehicles. The companies said they would explore other projects to develop technology for reducing fuel consumption and emissions.

BMW ended talks on fuel-cell cooperation with Detroit-based General Motors Co. (GM:US), the German company said on June 27. Fuel cells make electricity in a chemical process that combines hydrogen and oxygen, with water vapor as the only exhaust.

Toyota’s hybrid Prius became the world’s third-best-selling car in the first quarter as 247,230 were delivered, propelling the Japanese manufacturer back into the global auto sales lead ahead of GM. Since the Prius went on the market in Japan in 1997, Toyota has sold 4 million hybrid-electric vehicles worldwide, including 1.5 million in the U.S., the company said May 22.

The Japanese manufacturer introduced a gasoline-powered sports car, the 86, in Japan in April. The model is sold as the Scion FR-S in the U.S.

Joint Research

Research partnerships have become standard in the auto industry as manufacturers look to reduce development expenses to meet stricter emissions regulations.

“For the BMW group, strategic partnerships are an essential part of our strategy,” Reithofer said. “It is one way of securing long-term access to customers and technologies.”

BMW works with PSA Peugeot Citroen (UG) on engines for the Mini brand and on components for hybrid vehicles. Those projects are under review after GM took a stake in the Paris-based manufacturer as part of a broader alliance.

To contact the reporter on this story: Alex Webb in Munich via awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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