Isuzu and Toyota are looking for locations to produce diesel engines that they are jointly developing.

According to the Japanese newspaper, Nikkei, on Thursday, Isuzu president Susumu Hosoi said that the two companies are considering a manufacturing joint venture. The article reported that the partners are currently considering where the engines might be produced, both in Japan and overseas.

In August this year Isuzu and Toyota announced they they had agreed to collaborate on the development, production and supply of small diesel engines.

Toyota currently offers in-house developed 1.4-litre and two-litre turbodiesels in its European car lines which are built mostly in the UK (Auris and Avensis), France (Yaris) and in a joint small-car venture with PSA in the Czech Republic (Aygo). Other models are made mainly in Turkey, Thailand and Japan.

The pair said they would begin discussions on developing, production and supply of the diesel engine, but in principle, Isuzu would play the leading role. Production would begin around 2012.