The BMW Group and PSA Peugeot Citroën have set up a 50-50 equity joint venture named BMW Peugeot Citroën Electrification to expand their existing cooperation in hybrid systems.

The agreement signed on February 1 will focus primarily on developing and producing hybrid components, including battery packs, E-machines, generators, power electronics and chargers, while also developing software for hybrid systems.

This cooperative venture will enable us to achieve significant economies of scale in the field of electrification. It also represents an important step on the road to sustainable mobility, said Norbert Reithofer, Chairman of the Board of Management of BMW AG.

For several years the two groups have been successfully cooperating on engines, building together more than 1.8 million units from 2006 to 2010.

With this joint venture, we are sure to develop and expand our expertise and to build a European leader in the field of automotive hybrid innovation, noted Philippe Varin, Chairman of the Managing Board of PSA Peugeot Citroën.

The new initiative aims to develop standard hybrid components for the electrification of both the companies' vehicle ranges. Its plans to create an open European platform on those technologies that will help the European industry to structure itself in the field of hybridization.