Toyota (NYSE:TM) and BMW are planning to enhance their existing technology development partnership.
Unnamed sources say the two automakers are planning to include engineering research on lightweight vehicle designs and hybrid fuel engine power trains in an expanded parternership agreement, according to Reuters.
The growing alliance between BMW and Toyota will be discussed at a press conference in Munich, Germany, on Friday with Toyota head Akio Toyoda present. A formal contract has not yet been drafted.
The partnership began when Toyota sought BMW’s help providing diesel engines for the European market. In exchange, it shared research into lithium-iron batteries with the German car maker.
Analysts said they expected BMW to eventually adopt Toyota’s hybrid power trains in order to comply with European emissions standards.
In tapping Toyota for the expanding partnership, BMW passed over PSA Peugeot (PINK:PEUGY), with which it has worked on engineering research in the past. The ailing Peugeot, however, recently partnered with General Motors (NYSE:GM), clearing the path for BMW to look for other alliances.
Toyota shares were flat in early Wednesday trading in New York.
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