Arch rivals Toyota and Nissan are planning to work together to develop gasoline-electric hybrid vehicles in a move that is designed to help speed the development of more affordable and environmentally friendly cars.

This agreement, aiming for a long-term business relationship of 10 years or longer, calls for Toyota to supply state-of-the-art hybrid system components to Nissan. In addition, aiming for long-term technological cooperation, both companies have also agreed to start exchanging information and discussing joint development of components related to hybrid systems that both Toyota and Nissan are currently developing independently.

As an initial project, Nissan will be installing a hybrid system currently under development by Toyota in Nissan’s vehicles to be sold in the United States in 2006. Volume is expected to reach approximately 100,000 units within a five-year period starting in 2006. The components for the hybrid system, such as the transaxle and inverter, will be developed by Toyota, while Nissan will conduct development of its own engine and application of the hybrid system on its own vehicle, which will have a direct impact on Nissan’s product.

Although gasoline-electric hybrids, such as Toyota’s Prius, are proving increasingly popular, volumes are still small and vehicle manufacturers face a challenge in recouping the high development costs on the powertrain systems.

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