French carmaker PSA PeugeotCitroen and U.S. counterpart Ford on Wednesday said they woulddevelop a range of diesel engines to comply with new EUregulations, strengthening their existing partnership.
The two groups will invest around 300 million euros ($404million) in diesel engines compatible with Euro-6 for use incommercial vehicles and cars, they said in a joint statement onthe eve of the Paris Auto Show.
The first engines will go into production in 2013.
The two groups have worked together for 10 years on dieselengines.
Carmakers worldwide are looking to sign new partnerships orfirm up existing ones as they seek synergies from sharingdevelopment costs and access to lucrative new markets.
PSA also has a partnership in place with Japan's MitsubishiMotors Corp on electric vehicles and 4X4s.
They announced an agreement on Wednesday to develop electricversions of the Peugeot Partner and Citroen Berlingo lightcommercial vehicles in PSA's factory in Vigo, Spain.
PSA also works with Italy's Fiat and Japan's Toyota. ($1=.7426 Euro) (Reporting by Gilles Guillaume; Writing by HelenMassy-Beresford; Editing by James Regan and Hans Peters)