The BMW Group and PSA Peugeot Citroën have announced that they will expand their cooperation by including hybrid components for front-wheel drive vehicles.

A memorandum of understanding has been signed by Norbert Reithofer, Chairman of the Board of Management of BMW AG, and Philippe Varin, Chairman of the Managing Board of PSA Peugeot Citroën.

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The components are to be used in front-wheel-drive vehicles with electrified drive trains. The collaboration will include the joint development and production of components as well as joint purchasing. It is hoped that scale economies will benefit both partners and that they will be able to standardise key elements for the electrification of vehicles.

“This cooperation will deliver a major contribution towards a competitive cost structure in the field of electrification. It also represents another important step on the road to sustainable mobility,” said Reithofer.

“We are pleased to broaden our long-standing cooperation based on the strong relationship that exists between our two companies,” added Philippe Varin. “Combining both partners’ expertise in hybrid technologies will clearly create competitive advantage.”

Both parties have agreed not to disclose financial details of the agreement.

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The BMW Group and PSA Peugeot Citroën have been successfully cooperating on engines for several years. In February 2010, the two companies agreed to develop the next generation of their jointly designed 4-cylinder petrol engine, which will also meet EU 6 requirements. The joint engine is currently built into a number of MINI, Peugeot and Citroën brand models.