Toyota To Supply Diesel Engines To BMW

Autoparts Report, May 22, 2002

Toyota Motor Corp. said it would supply 10,000 to 20,000 diesel engines per year starting in 2003 to BMW for the German carmaker's Mini brand. The Japanese carmaker said the engines, which Toyota makes for its own European subcompact the Yaris, would be shipped from Japan to the production center for Minis in the United Kingdom, according to The Financial Times.

The FT said that BMW would soon announce a production and development tie-up with Toyota after almost a year of negotiations.

BMW has said the new version of the British cult car the Mini was selling well as part of its efforts to create a "premium" segment of small cars.

Christopher Richter, an auto analyst at HSBC Securities, told the FT that the deal is probably not very big in monetary terms but does suggest Toyota is making good diesel engines. Japanese automakers have traditionally been seen as weak on small diesel engines. "BMW hasn't put a lot of resources into small diesel engines.

In Europe, it's mainly been Peugeot and Volkswagen that have led the field," Richter said. "It sounds like BMW wanted to be able to offer a diesel engine option but didn't want to go to a direct competitor," he added.