DaimlerChrysler, looking to meet tighter emission standards, on Tuesday announced a deal with Fiat for diesel engine technology.
The German-American company said the partnership will result in Fiat supplying 80,000 diesel engines per year beginning in 2009 to DaimlerChrysler's truck group, Mitsubishi Fuso. The group includes the Mercedes-Benz, Freightliner, Sterling, Western Star and Fuso trucks brands.
Daimler said that it saw the deal as a way to more easily save money and accommodate future emission standards as they come due.
"Today's and future emission regulations demand a high level of investment and technological specialization. This agreement provides a value added for both companies," Dieter Zetsche, the chairman of DaimlerChrysler, said in a statement.
The initial 80,000 diesel engines will be used in Fuso's Canter, a light duty model truck.
The companies are also considering collaboration on diesel engines for other markets.
This has been a big month for those rooting for diesel as the next "alternative" fuel.
Last week Toyota said that it would be making an announcement in July regarding the development of with Isuzu, a company known for its diesel engine expertise. The Nikkei newspaper also reported that Isuzu is setting up a Japanese plant to supply Toyota with 200,000 diesel engines per year by 2012.
And on Sunday, two, the legendary French endurance race.