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Thursday August 23, 5:57 PMToyota, Isuzu to jointly make diesel enginesTOKYO, Aug 23 (Reuters) - Toyota Motor Corp and Isuzu Motors Ltd said they would jointly develop and produce small diesel engines for use in Toyota cars for the European market, further strengthening the world's biggest automaker's product lineup.The details of the widely-anticipated alliance have yet to be ironed out, but Isuzu will play a primary role in the pact, and production of 1.6 litre, aluminium engines is slated to start around 2012, the two firms said on Thursday. "Toyota has never been a clear front-runner when it comes to diesel engines ... But Isuzu's diesel engine resources will help Toyota get that missing piece," Okasan Securities analyst Yasuaki Iwamoto said. Toyota bought 5.9 percent of Isuzu late last year to tap the truck maker's expertise in diesel engines. The two had been negotiating details on how to cooperate based on a broad agreement to jointly develop small, next-generation diesel engines. The Nikkei business daily reported in June that Isuzu would invest some 30 billion yen ($260 million) to build a new plant on Japan's northernmost island of Hokkaido to supply about 200,000 diesel engines a year exclusively to Toyota from 2012. Both companies said then that nothing had been decided. Toyota is keen to spread gasoline-electric hybrid technology as a fuel-saving alternative to pure internal combustion engines, but it is also looking to catch up with rivals in the diesel field. Ahead of the announcement, shares in Toyota closed up 2.0 percent at 6,680 yen, while Isuzu gained 4.7 percent to 554 yen. The Nikkei average rose 2.6 percent. ($1=115.95 Yen) |
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