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BMW and Toyota Team Up to Build Next Generation of Cars

Friday, 29 Jun 2012 | 10:02 AM ET
BMW and Toyota logos
Source: BMW and Toyota
BMW and Toyota logos

BMW, the world’s largest luxury automaker, is teaming up with Toyota, Japan’s largest automaker, to focus on the next generation of cars. More specifically they will be developing electric drivetrains, fuel cell technology and finding new ways to make lighter vehicles.

In announcing the new agreement, Toyota CEO Akio Toyoda said, “We are joining to make ever better cars.”

Joint ventures between automakers is not new, but this partnership has the unique potential to payoff where others have failed.

Both companies share unique expertise in drivetrain technology (Toyota with electric vehicles, BMW with race cars) and are adamant about putting that joint knowledge into new cars.

BMW CEO Norbert Reithofer calls it a “win-win” for both companies. "Toyota and BMW share the same strategic vision of sustainable individual future mobility," said Reithofer.

Extended Partnership

Just six months ago, BMW and Toyota agreed to work on developing lithium-ion battery cells. That will lead BMW supplying diesel engines to Toyota for models sold in Europe. In March, they started talking about extending their partnership.

"We respect each other,” said Mr. Toyoda adding, “I think this is shown by our taking the next step only six months since the signing of our initial agreement.”

All automakers are feeling greater pressure to cut costs, particularly when it comes to research and development in drivetrains and fuel saving technologies.

Typewriter to iPad?

Could BMW and Toyota create breakthroughs in drivetrain technologies that dramatically change the industry? Reithofer thinks so. After announcing the deal in Germany, Reithofer said the future of auto technology is to the shift from the typewriter to the iPad.

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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