Toyota Finally Goes Diesel

Posted on November 9, 2006

While many, if not all of the world’s major automotive manufacturers have moved quickly to add diesel engine engines to their propulsion portfolio, Toyota had remained strangely silent on the subject. Focused strongly on its gasoline hybrid vehicles, Toyota appeared to be sitting out rush to diesel as an environmental alternative.

That changed with this week’s announcement that Toyota Motor Corp. has formed an alliance with Isuzu Motors Ltd., with diesel engines at the center of the deal. In return, Toyota will provide Isuzu with hybrid technologies.

Toyota will purchase 100 million common shares of Isuzu from Mitsubishi Corp. and Itochu Corp. With that, Toyota will become Isuzu's third-largest shareholder, with a 5.9 percent stake.

The alliance will push Toyota and Isuzu aim to commercialize new small diesel engines within three years, with Isuzu taking the lead the joint project. The two companies said they will set up a study team for the project as early as this month.