April 23, 2014

BMW Toyota diesel engine deal not for Lexus

BMW Lexus

Lexus won't get BMW diesel engines despite the Toyota deal

The deal for BMW to supply Toyota with diesel engines for its range in Europe will not extend to Lexus models.

The deal for BMW to supply diesel engines to Toyota for Europe (and joint work on advanced lithium ion battery technology) makes a lot of sense. BMW’s diesel engine are possibly the best there are, and Toyota need good diesel offerings in Europe to mop up sales.

That deal will be good for Toyota sales and good for BMW’s bottom line, and collaborating on next generation lithium ion batteries is a sensible move to utilise Toyota’s experience, and BMW’s bank balance, to share the burden of R & D. But what of Lexus in all this?

With the exception of the diesel lump in the IS, Lexus efforts in Europe rely heavily on Hybrid Technology. That limits the appeal of Lexus, particularly for company cars, and it seemed there may be scope for the 2.0 litre BMW diesel to find its way in to the Lexus IS, and perhaps even a bigger engine for the new Lexus GS to make it truly competitive in Europe. But it seems not.

It seems that providing diesel engines for Lexus is a step too far for BMW. It’s one thing helping a mainstream marque like Toyota – with little or no buyer crossover – but putting BMW’s silky diesels in a Lexus is seen as a likely shot in the foot.

Not that BMW has too much to fear from Lexus in Europe. Lexus is very much a niche car, and with no plans to put a diesel lump in the new Lexus GS, they’re likely to stay that way. BMW sales in Europe are 24 times those of Lexus, so even a diesel engine from BMW in the new GS would be unlikely top change that very much.

Which is a bit of a shame, as we’d love to have seen a powerful diesel engine in the new GS. But you can’t blame BMW for protecting their position.

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