TOKYO, JAPAN – Toyota Motor Corp. has decided to outsource production of low-pollution diesel engines to Isuzu Motors Ltd, the Nikkei reported, without citing sources, according to the Web site www.forbes.com. Isuzu will invest about 30 billion yen to build a diesel engine plant in Hokkaido that will exclusively supply Toyota, which plans to use the engines in passenger cars sold in Europe. The new facility is expected to produce 200,000 units a year from 2012 onwards.

By partnering with Isuzu, which has advanced diesel engine technology, Japan’s top automaker aims to challenge Honda Motor Co., which plans to introduce passenger vehicles equipped with clean diesel engines in Japan and the United States in 2009, the newspaper said.

Toyota formed a capital tie-up with Isuzu last November, taking a 5.9 percent stake in the truckmaker. The two firms are jointly developing a 1.6L diesel engine that features fuel injection and catalyst technologies.

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