German car major BMW and French carmaker PSA Peugeot Citroen have decided to form a joint venture to take advantage of “significant economies of scale” for their hybrid and electric cars.
The companies said in a statement that the joint venture will develop and produce hybrid components for their own operations as well as other manufacturers.
The joint venture plans to create an “an open European platform” to produce components such as battery packs, chargers, e-machines, generators, power electronics along with the software required to run hybrid systems.
The joint venture will “help the European (automobile) industry to structure itself in the field of hybridization”, the companies said adding it will help manufacturers to integrate the supply chain by outsourcing development work to them.
The joint venture – aptly named as BMW Peugeot Citroen Electrification will start its operations from the second quarter of this year and will start commercial production from 2014.
The joint venture will be headed by Wolfgang Güllich – BMW’s current head of purchasing strategy and will draw talent from their existing staffers as well as from outside. However, no details about the investment and capital structure were given out.
BMW and Peugeot are developing electric cars like their competitors to meet tougher emission norms and growing customer demand. Citroen and Peugeot had last year launched their electric vehicles based on Japanese automaker Mitsubishi Motors’ Mi-EV platform.
The industry has seen some consolidation recently with Daimler of Germany joining hands with Renault/Nissan to develop a range of technologies, electric vehicles.