NSK, the world's second-largest manufacturer of electric power steering systems, and Toshiba have formed a joint venture to develop electric power steering systems.

The companies expect demand for the systems to grow with the increasing popularity of greener cars since electric power steering systems are more efficient, typically help to improve fuel economy by up to 5% compared to vehicles with hydraulic power steering.

Currently some 40% of new vehicles worldwide have electric power steering, said NSK.

NSK has taken a 51% stake in the Y200m (US$2.48m) joint venture called ADTech. NSK will handle overall design and production while Toshiba will help with the software side, and the venture aims to launch a product in 2013.

Toshiba, which has said that the auto industry is a focus area for new business, reached a deal with Ford this year to supply drive motors for hybrid vehicles, while Toshiba and Mitsubishi are jointly developing lithium-ion batteries for electric vehicles.

Toshiba aims to increase sales from its auto-related business to Y700bn in the year starting April 2015 from Y200bn expected for this financial year.

The world's largest manufacturer of electric power steering systems is Japan's JTEKT.