Toyota and Isuzu announced today that they have reached an agreement to collaborate on the developent, production and supply of small diesel engines. The deal has been in works since last November when both companies began studying the benefits of collaborating to use their R&D and development facilities.

The diesel engine that the two will develop is a 1.6-liter engine with an aluminum cylinder block. It will be used for Toyota cars sold in the European markets.

Isuzu and Toyota will begin discussions on the details of development, production and supply of the diesel engine, but Isuzu is said to be playing the leading role. Production is scheduled to begin around 2012.

Source: Toyota

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