Under the plan, Toyota Motor Corp. would supply the key components of its hybrid cars for Mazda Motor Corp., allowing Mazda to enter the green car market as early as 2013, with an initial sales target of 100,000 units, the Nikkei business newspaper said.
Mazda had approached Toyota for a dal, and Toyota is nearing a final decision to accept it, the Nikkei said, adding that an official announcement was expected soon.
Both Toyota and Mazda said they had no immediate comment. Mazda spokeswoman Yukari Hara said officials were currently verifying the report.
The deal would allow Toyota to ct costs of hybrid components through mass production, while earning profits from Mazda, the Nikkei said.
Green cars are gaining in popularity in Japan thanks in part to tax breaks from the government.
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