Toyota and Mazda have reached an agreement in which the hybrid champion will supply Mazda with key components used to build a hybrid car that Mazda plans to launch in 2013, according to Japanese daily Yomiuri Shimbun.

The deal will see Toyota provide Mazda with the motor, control system and other hybrid components from the Prius. Batteries for Mazda’s hybrid will be supplied by a joint venture set up by Toyota and Panasonic. The report also says that Mazda will probably fit all these into its Axela, which the rest of the world knows as the Mazda3.

This will be a win-win situation for both parties. For Mazda, it provides much-needed green tech (it already lags behind rivals in this area) without a huge R&D outlay that a company its size may not afford. For comparison, Mazda’s R&D spend for the financial year ending March 2010 is expected to be 92 billion yen, which is about one-eighth of Toyota’s mammoth 800 billion yen.

Toyota meanwhile should be happy with better economies of scale for its hybrid components, most of which is self-developed at high costs.