Top German luxury car makers BMW and DaimlerChrysler (aka Mercedes) are to cooperate on the creation of a new hybrid drive system for top-end rear-wheel-drive cars.
The companies say that pooling their knowledge will bring the new hybrid system to market within three years, and also enable them to benefit from economies of scale.
Though both companies will work together on the components for a hybrid system, each will apply it in their own way.
"The distinct identities of the different brands will not be affected, since the relevant technologies will be tailored to fit the specific character of the different vehicles," said Dr Klaus Draeger of BMW.
BMW and DaimlerChrysler are already working together on hybrids in the US, as part of a project that began in 2005. However, the new development – which will focus on what is known a s a 'mild' hybrid system - will take place in Germany.