BMW, Peugeot to Co-Develop Hybrid Components

March 1, 2011
$138-million joint venture to start this year, supply parts by 2014

The BMW Group and PSA Peugeot Citroën intend to invest up to $138 million in a joint venture to develop and manufacture components for hybrid vehicles, according to several reports from this week’s Geneva Auto Show. The two automakers, one German and one French, have been co-developing four-cylinder engines since 2002, and building those engines together since 2006. In February 2010 they agreed to develop a new four-cylinder gas engine that will comply with EU 6 emissions requirements. Their plan to cooperate toward hybrid vehicle products was reported earlier this year.

“Hybrids and plug-in hybrids offer the best tradeoff between range and carbon emissions in the coming years,” stated Philippe Varin, CEO of Peugeot.

The plan is to develop hybrid components for compact, front-wheel-drive cars, as well as software for hybrid systems. Later, the venture may be expanded later to produce high-voltage batteries, electric engines, and chargers.

The new venture, BMW Peugeot Citroën Electrification, will have its research and development center in Munich, Germany, and manufacturing operations at Mulhouse, France, with about 400 total employees who will develop and supply components for the partners’ hybrid vehicles beginning in 2014. The venture is expected to launch in the second quarter of this year.

BMW Peugeot Citroën Electrification will be an independent company jointly owned by the two partners.

Peugeot is producing two electric vehicles now, and forecasts to be manufacturing 40,000 electric cars and vans per year by 2014. Also, it is launching diesel hybrid versions of its Peugeot 3008 and Citron DS5 models this year, and will offer a hybrid version of Peugeot’s 508 in 2012.

“We believe hybrids and plug-in hybrids will deliver the best trade-off between low carbon emission and range over the next 10 years”, Varin said.

BMW will use the joint venture’s components for its front-wheel drive vehicles, which will be the common platforms for its Mini brand and BMW small cars starting in 2014. Battery-electric and rear-wheel-drive vehicles may be offered in the future, and a hybrid version of BMW 5-Series midsize car will be introduced this year. A hybrid version of the 3-Series is expected in the future. A new series of BMW electric cars is expected to be introduced in 2013.

"BMW Group and PSA share the same vision of the importance of hybridization in the future," stated BMW CEO Norbert Reithofer, at a news conference. "Joining forces … means significant economies of scale, shared development costs, using standardized components and a faster development process."

"We aim to create an open European platform and foster the development of European standards for hybrid technologies," according to Varin said at the news conference.

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