BMW and PSA in surprise engine joint venture
By: AWKnowledge staff writer, Friday, July 26, 2002, AutomotiveWorld.com
In an unlikely partnership, BMW is to join forces with PSA Peugeot Citroën to jointly develop and assemble gasoline engines. Following more than a year of talks the partnership will see up to 1m small engines produced per annum. The engines will be used by Citroen and Peugeot as well as BMW's next generation Mini, due in 2007.Since the production target for the Mini is 130-140,000 units per annum, most of the engines will be used by PSA Peugeot Citroën, though the companies have said that costs will be split evenly. The BMW R&D department will design the engine with a common project team set up at BMWs research centre in Munich; PSA Peugeot Citroën will oversee parts procurement and engineering. Though there is no announcement as to where the engine will be made, PSA said that it will not threaten its existing engine plants at Douvrin in and Tremery in France.
The new alliance is one of several by both vehicle manufacturers who regard such deals as a way of protecting their independence. BMW is working with Toyota to supply diesel engines for the Mini, whilst PSA Peugeot Citroën has a joint-venture with Ford for diesel engines. The venture will also help PSA Peugeot Citroën to compete with rival French manufacturer Renault, following its purchase of a large share in Nissan, giving them access to the Japanese company’s engine expertise.
In another development, Tritec, the engine-producing joint venture between BMW and DaimlerChrysler, may be forced to increase production at its plant in Parana, Brazil. The plant manufactures the engine for BMW’s new Mini which has been a runaway success since launch. First year production of 80,000 Mini engines in 2001 has already increased 110 percent to a planned 170,000 units for 2002. The company says that it could produce a maximum of 400,000 engines a year and currently runs two shifts for an output of 700 engines a day. Tritec hasn’t yet confirmed that BMW has requested a further increase in production for the Mini.Chrysler has reportedly just cut its requirement to only 3,000 engines a year, so the future of the BMW/Chrysler venture could be under threatTritec exports all of its engines, with 80 percent going to the Mini and the other 20 percent to the Chrysler PT Cruiser and the Dodge Neon. However, Chrysler has reportedly just cut its requirement to only 3,000 engines a year, meaning that the future of the venture could be under threat. DaimlerChrysler has long made it known that it would like to use Mercedes engines and gearboxes in its US product to cut costs through economies of scale – this could be on the cards for the PT Cruiser and the Neon.
Dana is a key supplier of components such as water and oil pumps to the Mini engine and is also based in Brazil.
Published on Friday, July 26, 2002
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