BMW and PSA Peugeot Citroën plan to spend EUR100mon their hybrid technology joint venture named BMW Peugeot Citroën Electrification, both companies announced at a press conference in Geneva on Monday.

The new company will operate out of two locations – in the greater Munich area, Germany and Mulhouse, France. 400 employees are expected to work for the joint venture by the end of 2011. Subject to approval by the relevant competition authorities, the new company is expected to launch its operations in the second quarter of 2011. The new hybrid components will equip both partners’ vehicles from 2014 onwards. 

PSA head Philippe Varin said: “As responsible carmakers, we aim to create an open European platform and foster the development of European standards for hybrid technologies. This joint venture will also enable us to develop advanced technological manufacturing expertise in Europe in the field of electric powertrains, and to retain all its potential for creating value.“

BMW chairman Norbert Reithofer said: “BMW Group and PSA share the same vision of the importance of hybridisation in the future. The joint venture will enable us act more strategically and with a single, shared approach. For us, joining forces also means significant economies of scale, shared development costs, using standardised components and a faster development process.” 

The greater Munich area is the designated location for all research, development and purchasing, while all production will be in Mulhouse. The 400 employees expected to be on board by the end of the year will be based in Munich. Additional jobs in Mulhouse will be added in time for the start of production in 2014. When production has fully ramped up, the French facility will have about 250 employees.

The joint venture’s management, as well as its workforce, will be mostly drawn from employees of the two parent companies. Apart from this, the plan is to fill 100 new positions with external candidates when the joint venture becomes operational later this year. Needed mostky are engineers specialised in electric mobility and electronics. 

BMW and PSA have been cooperating for almost 10 years. In 2002, both partners agreed to jointly design and produce four cylinder engines. Between 2006 and 2010, more than 1.8m motors were built for Mini, Peugeot and Citroën models. In February 2010, the two companies also agreed to develop the next generation of their jointly designed I4 petrol engine, which will also meet EU 6 requirements. 

The latest initiative between the two companies is aimed at developing and producing standard hybrid components for the electrification of their respective vehicle ranges. It will focus on components like battery packs, E-machines, generators, power electronics, chargers, and software for hybrid systems.

The joint venture will be a full-fledged company and will both integrate suppliers by outsourcing development work as well as sell hybrid components to third parties.