Japanese auto makers Toyota and Nissan have joined forces to develop "hybrid" eco-friendly vehicles.

The 10-year alliance - the first such agreement between the two companies - calls for Toyota to supply system components to Nissan for an undisclosed fee.

The companies also agreed to exchange information and discuss joint development of environmentally friendly technology to boost efficiency and cut costs.

Hybrid vehicles are more efficient than conventional cars, because they combine an internal combustion engine with an electric motor.

Toyota, one of the leaders in hybrid technology, already makes a hybrid model, the Prius; Nissan, meanwhile, has long been seen as a laggard in the market.

US targeted

Toyota says its strategy is to boost the worldwide market for hybrid vehicles, currently extremely small.

Nissan has been slower off the block

One of the first projects would be for Nissan to install a hybrid system currently being developed by Toyota in its vehicles to be sold in the United States.

This could cover as many as 100,000 vehicles in 2006-11.

Although Toyota will remain the dominant supplier of technology, Nissan plans to develop its own engine and application of the system on its vehicles.

But cooperation between the two firms is likely to be limited to the US market for now, because demand for hybrid cars is higher there than in Japan.

Joining in

The Toyota-Nissan deal is the most ambitious in a series of tentative partnerships to develop the next generation of automotive technology.

Currently, Nissan and France's Renault cooperate in fuel-cell technology, while Toyota has a similar agreement with US giant General Motors.

According to Nissan, the Toyota deal could be extended to Renault - the firm that controls it - if the French car maker expressed interest.