The battle to survive the global credit crunch is about to bring age-old German competitors Daimler and BMW together in a cross-ownership deal, German news magazine Der Spiegel has reported.
Daimler and BMW have been discussing a parts and component sharing deal since last year and it seems that, to cement the deal, the two are also considering taking a significant shareholding in each other.
Questioned about the proposed BMW/Daimler technical co-operation last week at the Geneva show, BMW technical director Klaus Draeger said that BMW was “always looking for savings and efficiencies”.
Both companies are facing an unprecedented downturn in sales. They both suffered 24 per cent drops in production in February.
Together with VW, there is already an informal technical co-operation between BMW and Daimler that ensures basic components are built to similar specs to keep costs down for the German supply industry.
That agreement is now poised to go much further. One source is quoted as saying: “We will get closer through this deal, perhaps more will come.”
Major projects are being discussed, including developing a common front-drive platform to underpin the next Mini and A and B-classes, plus front-drive powertrains.
A cross-shareholding of seven per cent in each company was the figure quoted in Der Spiegel, although both BMW and Daimler refuse to discuss details.
According to the German magazine, the plan is facing opposition from the Quandt family, which owns 46 per cent of BMW.
Their concern is that Daimler might use the cross-shareholding as a foothold to launch a full takeover of BMW, in the same way Daimler turned its ‘merger’ with Chrysler into complete ownership.