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 low-emission diesel engines for cars 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 diesel-powered race cars took first and second place at 24 Hours of Le Mans, the legendary French endurance race.