Toyota and Mazda are reported to be considering a comprehensive partnership in environmentally friendly technology as the world’s regulators demand cuts to greenhouse gas emissions and competitors roll out greener vehicles.

The Japanese carmakers are in the final stages of talks on the planned partnership, according to the Nikkei business daily, which added the two “intend to reach an accord in principle soon”.

Under the partnership Toyota proposed to supply fuel cell and plug-in-hybrid technology to Mazda, which in return would offer its proprietary Skyactiv green technology to Toyota, which it hoped to use to grow its line of fuel-efficient petrol and diesel vehicles.

The companies are also said to be considering cooperation in other areas, including Mazda’s procurement of commercial vehicles from the Toyota group and joint purchasing of car parts.

The firms have previously worked together in several fields. Toyota provided hybrid vehicle technology to Mazda in 2010, while Mazda agreed in 2012 to supply subcompact cars from a Mexican plant to Toyota.

The latest alliance was part of an effort to jointly address strict global environmental rules, the Nikkei said.

In 2018 California plans to push carmakers to boost sales volume for electric and fuel cell vehicles, while China and other emerging economies are also set to strengthen environmental regulations.

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