PSA Peugeot Citroën is due this week to unveil the latest in a string of partnerships with fellow automakers, when it announces a deal with Japan’s Toyota.

The duo, whose senior executives will sign a memorandum of understanding on Thursday, are to develop a range of small entry-level cars, likely to be produced at a plant Toyota is opening next year in Poland.

Citroën has forged alliances with a range of rivals over the years, including Renault, Ford, Fiat, Mitsubishi Motor and Daihatsu. “I think it’s better to co-operate with several partners than to do everything with a single partner,” explained the French firm’s chairman Jean-Martin Folz. “The probability of always finding the same convergence with the same carmaker is smaller than if you seek convergence with different carmakers.”

Toyota, for its part, sees the deal as a means to raise sales and market share in Europe – where it suffered a E219.5 million ($184.4m) loss in its last financial year – while splitting investment costs. It aims to increase European sales 20% to 800,000 units by 2005.

News source: Financial Times