Toyota is joining forces with Peugeot to produce a new breed of passenger cars.  A memorandum of understanding, signed on 12th July, paves the way for the joint production of fuel–efficient and environmentally–friendly vehicles.  By working together, the two companies hope to achieve significant economies of scale, thus enabling them to produce models which cost less than those in the current small car segment, but which still offer a higher level of safety and performance.