SINGAPORE - BMW AG is discussing the purchase of diesel engines for its new Mini from Toyota Motor Corp.
Toyota will produce 1.4-liter diesels for its Yaris subcompact in early 2003 at a new plant in Valenciennes, France. Buying engines would enable BMW to offer diesels - a powerful sales point in Europe - on the Mini that same year.
'We're in serious talks (with Toyota),' although no deal has been struck, Michael Ganal, a BMW sales director, said in an interview here. Toyota declined to comment.
An agreement also would help Toyota increase production efficiency at the French plant. The company has said it expects to produce 30,000 to 40,000 engines a year at the plant, far below a typical engine plant's accepted break-even point of 200,000 or more a year.
'That could be a big factor' in Toyota deciding to cement a deal, said Takashi Nakanishi, an analyst at Merrill Lynch Japan Inc.
BMW plans to introduce the Mini in Britain in June, on the Continent in September and in the United States and Asia, including Japan, next spring.
BMW says it expects to sell 100,000 Minis a year worldwide, but it has not projected diesel sales.