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With a release set for early 2014, the new engine will help to offer an alternative engine range for customers to choose from.
According to the engineers at Toyota Motor Europe, the engine has been seamlessly integrated into the all-new vehicle.
Didier Leroy, senior managing officer at Toyota Motor Corporation and CEO of Toyota Motor Europe, said: "Hybrid is at the core of our strategy towards sustainable mobility, but we also see a role for clean diesel in Europe.
“Working together with an industry leader like the BMW Group allows us to benefit from economies of scale to reduce development costs as well as improve our time-to-market.”