Sanyo to supply hybrid car batteries to Peugeot

TOKYO, Nov 2 (Reuters) - Japan's Sanyo Electric Co Ltd (6764.T) said it would supply nickel-metal hydride batteries to PSA Peugeot Citroen's (PEUP.PA) hybrid cars, broadening the pool of customers for its green car batteries.

Sanyo will provide its battery systems for the diesel-electric hybrid cars that the French maker plans to start manufacturing on a commercial basis in 2011, the world's largest rechargeable battery maker said.

Battery systems are made up of battery cells and a component that controls the flow of electricity.

Sanyo, set to be taken over by larger rival Panasonic Corp (6752.T), is betting heavily on batteries for hybrid vehicles as demand grows for such cars due to government subsidies and concerns about global warming.

A Sanyo spokeswoman declined to comment on the size of the transaction, but the Nikkei business daily said on Sunday the Osaka-based electronics maker plans to provide the battery systems to Peugeot Citroen for several tens of thousands of cars a year.

Sanyo already supplies its nickel-metal hydride batteries for Honda Motor Co Ltd's (7267.T) and Ford Motor Co's (F.N) gasoline-electric hybrid cars.

Shares in Sanyo closed unchanged at 228 yen on Monday, outperforming the Tokyo stock market's electrical machinery index .IELEC.T, which lost 2.9 percent. (Reporting by Kiyoshi Takenaka; Editing by Joseph Radford)