Report: BMW, Mercedes May Partner on Small Cars

BMW AG and Daimler AG may collaborate on their next-generation small-car platforms, sources tell Handelsblatt.

The German business daily notes that co-developing the BMW Series 1 and Mercedes-Benz A-Class models would save the rivals billions of euros in product development costs. The funds freed up by partnering would be used to help fund each company’s autonomous-driving program.

BMW and Toyota Motor Corp. cooperated in a similar program that resulted in the Toyota Supra and BMW Z4 sport coupes, which will reach the market later this year.

Handelsblatt cautions that a partnership on more mainstream subcompact cars would inevitably face resistance from the engineering staffs of both companies. If the plan moves forward, the first jointly developed vehicles aren’t likely to appear until at least 2025, according to Handelsbatt.