French carmaker PSA Peugeot Citroën and German components group Robert Bosch say they have agreed on a strategic partnership to develop diesel hybrid technology.

The deal will see Bosch co-develop, industrialise and supply electric motors and power electronics for PSA’s four-wheel-drive diesel hybrid powertrain.

Unveiled at the Paris Motor Show on the Peugeot Prologue and Citroën Hypnos concept cars, this innovative diesel hybrid technology will equip Peugeot and Citroën vehicles starting in 2011.

Diesel hybrid technology is a key focus of PSA’s environmental strategy, and developing and industrialising this technology is a major challenge for the carmaker.

Bosch, the world’s leading automobile equipment manufacturer, has been chosen to supply a number of components for the system.

It be responsible for the rear electric motor, the front-mounted high voltage alternator and the power electronics that will control them.