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BMW has confirmed that it is talking to rival car manufacturers about selling them engine and gearboxes.

BMW’s head of development, Klaus Draeger, told Auto Motor und Sport that BMW is in advanced talks about the possibility of licencing its engines to Mercedes.

“We are ready in principle to sell our engines to a competitor. And yes, we are talking openly with Mercedes about several possibilities,” Draeger said.

One strong possibility is for BMW to supply Mercedes wi...Read the full article

Wasn't there some talk about them collaborating on smaller engines as well? I got quite excited at the idea of a 'Valvetronic'-equipped A-Class. Once depreciation had given it a good kicking, of course...

This is nothing new as the Vauxhall Opel Omega used a BMW diesel engine in the early nineties - slightly de-tuned of course.

Im suprised Mercedes wouldnt be too proud to buy a BMW engine. Almost as if they're admitting they cant afford or dont have the technology to produce an engine on their own. It would be more understandable if they built an engine together from scratch.

I understand why this sort of thing happens and I guess it will become even more common in years to come, but i cant help thinking its another nail in the coffin of having individuality between brands. Saying that, im sure that Merc/BMW cars will still be quite different - even if they do share an engine.

Oh my word, the ground has just opened up before me.  It's one thing for BMW to sell a diesel engine to Vauxhall for the Omega but this is something quite different.  These two are the fiercest of rivals, and I simply cannot see this happening.  Times are hard but the economic outlook can't be that bad.

It would be like Ferrari fitting a Porsche flat six into their next offering.  Just can't see it happening at all.  Mercedes strongest selling point has always been the quality of their engineering, what would this say to the world if they had to effectively buy an engine of their deadly rival?

What is going on?

The best 2 or 3 engine makers, arguably BMW, Honda, Porsche, should just colloborate and make all engines, from little 4 cylinder ones to big V12s, for everyone else to use.

Then the same again with chassis.

Hopefully, all cars in any sector will end up being the same.

I'm sorry, but some of you are running away with this story beyond what it actually is. If you wish to read the original report directly, rather than rely upon Autocar's report of it, see it here at Auto Motor Und Sport:

http://www.auto-motor-und-sport.de/news/wirtschaft_-_handel/hxcms_article_516418_13987.hbs

The main thrust of the information elicited by interviewing the BMW Development Director by AMS magazine is the continuing discussions by BMW and Daimler on the joint purchasing of parts, systems, whatever, which are not obviously brand identifiable. The subtext of this is BMW and Daimler need to counteract VW's 6 million+ a year purchasing contract muscle in order to competitively produce A/B classes and 1/3 series cars especially, not to mention Toyota's c.10m unit purchasing stength and even PSA and Renault's roughly 3m units each. Jointly, BMW and Daimler have no more than 2.5m units to offer to suppliers to lower economies of scale.

As to Mercedes throwing the towel in on engines, forget it. There's mention in the AMS report of joint use of BMW's 12 cyl. engine. That's it. Even this I doubt will happen. Daimler, realising the gravity of the economic collapse taking place, would not see a V12 engine option as particularly vital right now, even with Maybachs or top-end S class's. With oil and gold headed for 50+% and 30+% falls respectively even the billionaires of the Gulf States, Russia and China - by dint of no longer being able to flog piles of junk to bankrupt West - are all feeling the pinch and demand for plutocratic V12 limousines will drop like a stone. It's back to the pre-80s I'm afraid.