Toyota Motor Corp. and Mazda Motor Corp. have reached a broad agreement in which the former automaker will supply the latter with key components used to build a hybrid car that Mazda hopes to market in 2013, company sources said.

Toyota and Mazda are currently working to set the prices of the parts.

The carmakers are expected to sign a formal agreement on their deal by the end of the current fiscal year, according to the sources.

The accord will require Toyota to provide Mazda with the motor, control system and some other main components of its best-selling Prius hybrid vehicle.

The components will be used to produce tens of thousands of Mazda hybrid vehicles annually. Rechargeable batteries needed to build Mazda hybrid vehicles will be supplied by a joint corporation set up by Toyota and Panasonic Corp.

Mazda likely will manufacture its first model by outfitting its compact car, Axela, with the components supplied by Toyota, according to the sources.

There has been a pressing need for carmakers in many nations to increase eco-friendly car lineups at a time when their respective governments are offering rebates and other eco-car purchase incentives aimed at encouraging their domestic economies and helping reduce global warming gas emissions.

However, Mazda has yet to build hybrid vehicles or electric cars, and is also finding it difficult to receive technical aid from financially troubled Ford Motor Co., the largest stakeholder in the Japanese carmaker.

Mazda's research and development expenditures are expected to total only 92 billion yen--about one-eighth of Toyota's 800 billion yen--during the business term ending in March 2010. With its own modest R&D spending in mind, Mazda decided it would be impossible to develop a hybrid vehicle on its own. In May, the company asked Toyota to provide it with key components needed to build them.

Meanwhile, Toyota's parts supply would also make it possible to further reduce its production costs because of the profits to be gained from the transactions with Mazda. However, Toyota has said it has no plans to form a capital tie-up with Mazda.