Is It A Bimmer Or Toyota?Japan Times Reports That Toyota And BMW Near Diesel Engine Deal

NAGOYA Toyota Motor Corp. and BMW AG are in the final stage of negotiations over a deal that would see Toyota supply diesel engines for the German automaker's Mini line, company sources said Wednesday. Should an accord be finalized, it would be the first time for the Japanese automaker to sell diesel engines to a company outside its group, they said.

Toyota has been pursuing the development of compact diesel engines and is aiming for an early return on its investments via supply deals with outside firms, they added.

Regarding its involvement with BMW, Toyota is considering supplying the German firm with a modified version of a 1,400cc diesel engine featured in the Toyota Yaris, a compact manufactured in France.

Toyota would supply BMW with between 20,000 and 30,000 diesel engines annually, beginning in 2002 at the earliest, the sources said.

Diesels have become popular in Europe and in recent years Japanese automakers have made inroads into the European diesel market. Isuzu, for instance, supplies Swedish automaker Saab Automobile AB with 3,000cc diesel engines.