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Toyota and BMW have an agreement for Toyota to use the BMW 1.6 and 2.0 litre diesel engines only for some cars produced in Europe, and to share hybrid battery technology, not hybrid drivetrain technology.
It is cheaper for Toyota to use a bought in engine for Europe, rather than develop a new 1.6 diesel. The 1.4 diesel that Toyota use in Europe (Auris and Yaris) is a Toyota unit, and is built in Europe.
Toyota haven't abandoned the diesel engine - having introduced new 2.4 and 2.8 litre diesels last year, which feature in the Hilux (though only the 2.4 is sold in the UK).
So we won't see BMW producing a model that uses Toyota's hybrid drivetrain - just the battery technology.
Mazda on the other hand have signed a licence with Toyota to use the Prius drivetrain in their hybrid models.
Toyota have been selling a re-badged version of the PSA Expert/Dispatch panel van since 2013, as this proved cheaper than exporting the Hiace. With Fiat dropping out of the joint venture with PSA, Toyota shared development with PSA of a new of van range - hence the new Proace that has been launched this year. As with the previous model, this is built by PSA and uses PSA engines.
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