Dominating Hybrid Technology

The BMW Group and PSA Peugeot Citroën have maintained a partnership for nearly a decade. Following an agreement in 2002 for the joint design and production of four-cylinder engines, they produced over 1.8 million engines for MINI, Peugeot, and Citroën between 2006 and 2010. Furthermore, in February 2010, they agreed to develop next-generation joint-design four-cylinder gasoline engines that comply with EU 6 emission standards.

The announcement of the joint venture company, "BMW Peugeot Citroën Electrification," for hybrid technology development follows this collaboration. The purpose of establishing the joint venture is to develop and produce the standardized hybrid components necessary for introducing electric drive systems into both companies' vehicle lineups. The new company will specialize in components such as battery packs, electric motors, generators, power electronics, and chargers, as well as the software for hybrid systems. This allows the parent companies to build an open platform for various technologies. In essence, it is a new company aimed at securing dominance in hybrid technology within Europe. Indeed, it has been announced that the company plans to integrate suppliers through outsourcing development projects and also to sell hybrid components to entities other than the parent companies.

Philippe Varin, Chairman of PSA Peugeot Citroën, stated, "As a responsible automotive manufacturer, PSA aims to establish a European open platform for hybrid technology and set European standards for this technology. Furthermore, the establishment of BMW Peugeot Citroën Electrification will enable us to develop advanced production expertise for electric drive systems within Europe and secure all possibilities for value creation."

Norbert Reithofer, Chairman of the Board of Management of BMW AG, added, "The BMW Group and PSA share the view that hybridization will be crucial in the future. A more strategic approach based on a common methodology will be possible, and through this partnership, BMW will achieve significant economies of scale, share development costs, adopt standardized components, and shorten development processes."

The new company will operate from two locations: Munich, Germany, and Mulhouse, France. All research and development functions will be based in the Munich area, while production will take place in Mulhouse. Operations are scheduled to commence in the second quarter of this year, pending approval from competition authorities. The new hybrid components are expected to be integrated into BMW and PSA Peugeot Citroën vehicles from 2014 onwards.