Toyota Motor is in talks to provide technology and core components for hybrid vehicles to its German rival Daimler AG, newspapers reported on Thursday.
The world's top automaker will consider providing Daimler with motors and batteries in addition to technology, upon the request of the German carmaker, according to the evening edition of the Nikkei business daily.
If they strike a deal, Daimler will be the fourth automaker receiving Toyota's hybrid parts and technology following Ford, Nissan and Mazda.
Sales of components to Daimler would help Toyota expand production of hybrid vehicles that run on gasoline and electricity, and thus reduce costs, the Nikkei said.
Toyota and Daimler will also consider forming a broad alliance that would cover cars powered by fuel cells, it added.
The two companies began negotiations a year ago, and their talks are now focusing on which hybrid parts will be supplied, said the evening edition of the Yomiuri Shimbun.
Toyota declined to confirm the reports, but acknowledged interest in expanding its supply of hybrid technology to rival carmakers.
"As has been our ongoing stance, if we receive requests from outside companies, we will consider the requests, taking into account factors concerning our production capacity and sales," it said in a statement."
Toyota's Prius hybrid has been a success for the carmaker, particularly in Japan where the compact vehicle has topped the country's best-seller list since May 2009.
The automaker has been plagued by safety recalls in the past year for unintended acceleration, engine, steering and brake problems, with around 10 million vehicles in total affected.