News from the Geneva auto show usually gets out in short order, but one tidbit went largely unreported: BMW and PSA/Peugeot Citroën announced what Car and Driver calls a "massive" €100-million hybrid technology joint venture. 

Details of the venture are now filtering out, and "massive" actually sounds like an understatement. The agreement encompasses both engineering and production for both companies' front-wheel-drive platforms from 2015 onward. It calls for cooperation on everything from battery packs to charging systems, and will also result in component sales to outside companies. Unsurprisingly, BMW plans to use the forthcoming technology in both plug-in and non-plug-in hybrids; the latter category includes the next-generation 1-series and next-generation MINI. 

Yes, there will be hybrid versions of both the MINI and the BMW 1-series. But that's not all. 

The implications of this announcement are interesting. First, it proves that both PSA and BMW want to go beyond relying on suppliers and third-party engineers for green work. This isn't that surprising for the giant PSA conglomerate, but it speaks volumes of BMW's desire to grow beyond its current market share in the next ten years—relatively speaking, it's currently a fairly small company. 

Second, MINI cooperation aside (the MINI's "Prince" four-cylinder is built by PSA) this agreement was something of a surprise to the industry. Judging by products already in the pipeline from both BMW and PSA, the deal appears to have been put together in relatively short order. 

BMW's upcoming i3 and i8 models, the first vehicles from the company's electric-vehicle BMW i sub-brand, are claimed to be too far along to benefit from the Peugeot agreement. But all of BMW's future green models — including range-extended electrics and rear-wheel-drive hybrids — will spring from the venture. (Note that development for the i3 and i8 isn't complete and will finish at the joint venture's Munich offices. Production will be handled by BMW.) PSA will use the fruits of the agreement in upcoming Peugeot and Citroën products, including the front-wheel-drive small-car lineup for both French brands. 

Despite the product and technology parallels, both BMW and PSA insist that their small-car lineups will remain on separate and unique platforms. 

The component-sale bit, however, is arguably the most compelling news. Take the situation with Saab: Last year, the Dutch-owned Swedish brand announced that it plans to use turbocharged BMW four-cylinders in its products, starting in 2012. The company then debuted the PhoeniX concept at Geneva, which uses a hybrid system developed jointly with American Axle; that system is intended to make its way into future production Saabs. If BMW and Saab are entering into a gasoline-engine deal, and cash-strapped Saab intends to filter hybrid technology into its lineup — and BMW happens to have a flexible, relatively inexpensive system for purchase — why would Saab bother developing the technology in-house? Moreover, what other companies might put the brakes on hybrid development now that the BMW-PSA component deal has been announced?

When the partnership was initially announced, BMW claimed that its purpose was to create an "open European hybrid platform" that helped give structure to the continental green-car landscape. Pending European antitrust regulatory approval, the venture should begin gearing up in the latter half of this year. 

[Source: Car and Driver.]