Bmw, Mercedes Soon to Join Forces?

We’ve always known Mercedes-Benz and BMW to be the arch-rivals in the uber-car market department; in fact most of us prefer these two great European automakers locked in a perpetual battle as to who comes up with the most luxurious car, the smoothest performance, the neatest in-car gadgets, or the best auto parts from the engine down to the Mercedes or BMW camshafts.

But it looks like in the ever-changing car industry no rivalries are really sacred.

BMW has recently expressed hope to join forces with DaimlerChrysler and the PSA Peugeot Citroen Group in the development of a hybrid technology, as well as for a new transmission and engine technology.

BMW Exec Klaus Draeger, in an interview with Auto Motor und Sport, revealed that component sharing between the three carmakers would not be impossible within the next four years. He however, discounted plans for common platforms.

With PSA, Draeger hopes to see further cooperation in engine development, referring to the deal it shared for the new Mini engine as an example of the success that could be achieved. According to Draeger, technology sharing can be done without compromising brand-specific characteristics of the engines.

BMW’s Marketing Chief, Michael Ganal has also confirmed BMW’s interest in working with Mercedes-Benz. “Cooperation is the right approach because it allows both carmakers entrepreneurial freedom,” Ganal reportedly told German newspaper Wirtschaftswoche.

Ganal did not say in which areas the cooperation between the two companies will increase, but said there are several possibilities.

Unfortunately for Draeger and Ganal though, Mercedes-Benz has earlier rejected a prior proposal from BMW that the two luxury carmakers should work more closely in the future, as revealed by Mercedes marketing Chieft Klaus Maier.

Maier, in an interview with Handelsblatt, acknowledged that the two had worked together in the past, commenting “we cooperate naturally with BMW in a few technical areas, like development of hybrid engines.” The consensus in the Mercedes boardroom however, is that there are no plans to work together beyond the current co-development of hybrid drivetrains.

There are rumors though suggesting that Mercedes may work with BMW for the production of the next-generation A-Class on the Mini platform from Beemer's Oxford factory.

Reuters, citing German motor magazine Auto Bild, is reporting that BMW, the world's largest premium carmaker, and its closest rival, Mercedes-Benz, are currently in negotiations over a partnership to build subcompact cars.

According to the report, the two companies are expected to make a decision in July on whether to build the next generation Mercedes A-Class on BMW's Mini platform.

A partnership with another automaker will benefit BMW since the heavy cost pressure could result in the loss of money for Mini should its Oxford, England, plant not run at full capacity.

Meanwhile, Mercedes has plans of building the next A-Class in 2012 on a platform to be developed jointly with Chrysler. These plans however have been sacked after parent DaimlerChrysler's disposal of its majority stake in the money-losing U.S. carmaker.