Toyota Motor Corp. and Isuzu Motors Ltd. will begin producing diesel engines for Toyota’s European passenger cars by 2012.

The engine the two will develop is an aluminum block 1.6L, they say in a joint release.

A report earlier in the summer had Isuzu supplying 200,000 engines to Toyota from a new plant on Japan’s Hokkaido island, but both auto makers say details regarding development, production and supply have yet to be ironed out.

However, “in principle, Isuzu will play the leading role,” the companies say.

Toyota last November purchased a 5.9% stake in the small Japanese truck maker as a way to expand its diesel footprint.