Toyota to supply hybrid technology to Mazda

C|Net | at | by Mike

Toyota Motor and Mazda Motor announced a deal under which Japan's top automaker will supply its hybrid technology under license to Mazda, in the latest linkup within the fast-changing auto industry.

Japan's No.1 and No.5 carmakers have been discussing the possibility behind the scenes since last spring as the popularity of gasoline-electric cars surged in Japan with the help of generous government subsidies.

Hybrid cars, which improve fuel efficiency by twinning internal combustion engines with electric motors, are seen as crucial for automakers to boost sales in the coming years as governments introduce stricter environmental regulations.