As per the latest news, Japan‘s 1 automaker Toyota has bought a 5.9 per cent stake in Japan’s diesel specialist Isuzu. Auto industry analysts  predict that this will lead to more diesel models carrying the Toyota badge.  The stake cost Toyota US$373 million. The move comes as Toyota appears on track to overtake General Motors as the world’s biggest automaker.

Toyota has been a leader on hybrid development, but has been a little behind the curve when it comes to diesel engine vehicles. It was especially humiliating for Toyota when its archival Honda boasted it would start selling clean diesel models in the U.S. within 3 years. Toyota’s interest in Isuzu is a clear move to bridge this gap.

Although Toyota owns Hino which manufactures medium and heavy-duty trucks, it does not have much experience with smaller-displacement diesels. So it figured that it might be best to partner with a company with primary expertise in compression-ignition engines. Isuzu was the natural choice for Toyota, as Isuzu is one of the oldest automakers in Japan with a history of developing and manufacturing diesel engines for more than 60 years.

Isuzu’s reputation in diesel engines is so hight that General Motors had earlier partnered with Isuzu for developing its next-generation  and 1-ton diesel engine for its pickup trucks.  With the General Motors selling its stake in Isuzu in April this year, Toyota saw it as the perfect opportunity to purchase 5.6 percent of the company, as well as tap its high level of expertise with diesel engines.

According to a statement, Toyota and Isuzu plan to work together in researching and developing small diesel engines, including cooperating on emission-control technologies as well as alternative fuel technologies. With this tie-up Toyota may perhaps come up with even the first production passenger-car diesel hybrid. Toyota will concentrate on alternative-fuel efforts, while Isuzu will take the lead on developing a range of small diesels and new diesel-emission technology.

In alternative fuel technology field, Toyota plans to develop a new diesel engine powered by bio fuel, with Isuzu Motors. The two automakers will develop a device to control the supply of bio diesel fuel to the engine and technology to secure the necessary strength of parts. Bio fuel engines reduce the emission so they are environment friendly.

Technorati Tags: , , , , , , ,