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Peugeot to supply diesel engines to Mitsubishi Motors

Peugeot, Europe's second-biggest carmaker, will supply diesel engines to Mitsubishi Motors from the middle of this year, expanding the two companies' partnership.

Mitsubishi Motors Corp. will use PSA Peugeot Citroen's 2.2-liter diesel engines in its Outlander sport-utility vehicles, the companies said in a release today. They didn't disclose financial terms. Mitsubishi Motors, Japan's sixth-largest automaker, agreed in July 2005 to supply Peugeot with sport-utility vehicles based on its Outlander model.
Diesel engines, which offer fuel economy comparable to hybrid vehicles, power half of all vehicles on the road in Europe. The agreement announced today „means the two companies extend their operational ties into the field of component supply,” Peugeot and Mitsubishi Motors said in the statement.
The Japanese automaker will supply 30,000 SUVs a year to Paris-based Peugeot from June 2007, the two companies said in 2005. Mitsubishi Motors said today it plans to release the Outlander powered with a diesel engine by the end of this year in Europe. Shares of Mitsubishi Motors fell 0.5% to close at ¥201 on the Tokyo Stock Exchange. (Bloomberg)