BMW-Mercedes alliance: the latest news

BMW-Mercedes alliance: the latest news

By Georg Kacher

Motor Industry

06 October 2008 17:13

BMW and Mercedes are continuing to work on joint projects, CAR can reveal. The two premium brands reckon working together might just stave off the threat of the credit crunch, collapsing car sales in key markets and the uncertainty wobbling the very foundations of the motor industry.

But the BMW-Merc collaboration is proving difficult, according to executives in Germany contacted by CAR. Maybe it's a mutual case of 'not Invented here'. Maybe it's what decades of ingrained rivalry does to you. Or a mix of shortsightedness, ignorance and stubborness. Perhaps a combination of the above.

And if they can't finalise a deal, BMW is likely to hop into bed with a rival manufacturer. Talks with the Fiat group are at an advanced state, too (more of which later).

What BMW and Mercedes are working on

BMW and Merc are finding it very difficult to agree on even the smallest common denominators. Like engines – be it the new V12 or the new small petrol-fed four. A common V12 looked for a while like a done deal. And for good reason: both brands want it, Rolls-Royce and Maybach need it, and together they could easily afford it.

BMW chairman Norbert Reithofer is in favour of collaboration, while his counterpart at Daimler, Dieter Zetsche, has also given the thumbs-up. But both men cannot change the corporate culture overnight. And that corporate culture forbids sleeping with the enemy.

Why are they working together?

The reason BMW and Mercedes top brass want to work together is a homegrown rival: the increasingly threatening VW/Audi/Porsche powerhouse, which builds more V10, V12, W12 and W16 engines than the competition combined.

That's why M-B has thrown M295 into the ring, its brand-new direct-injection stratified-charge twin-turbo all-aluminium V12. But so far, to no avail.

Click 'Next' to find out other ways BMW and Mercedes are collaborating