BMW and Mercedes have been rivals since 1929, but Detroit News columnist Christine Tierney reckons the two automakers are eyeing each other across the dance floor. Tierney points-out that Daimler-Benz (Mercedes to you and me) hooked-up with Chrysler to fend off the possibility of a hostile takeover. Now that the Chrysler divorce is going through, they're even more vulnerable than before. What's more, Tierney says the folks sheltering under the three-pointed star are "increasingly threatened" by Porsche's takeover of the VW Group. As Mercedes needs to off-load some of their R&D costs, and BMW CEO Norbert Reithofer just declared his intention to "wring out" $8b in savings to bolster his company's margins, and BMW is working with GM and Mercedes on hybrid powertrains… We reckon this Yenta's got a yen for mischief, and under-estimates the weight of history and the bad blood that flows between the Germans. Still, just ask Dr. Z; stranger things have happened.
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Press Release Munich/Stuttgart – January 1, 2009
After being competitiors for 80 years, BMW and M-B have reached a accord to join forces, take advantage of synergies and future cost savings.
The joint project of developing the new platform for the Mini and B Class sealed this marriage made in “heaven”.
The upcoming stringent EU regulations were another factor, as well as a desire by the Quandt family to diversify their holding.
Is it a merger of equals? A takeover? A union of conveneince? Time will tell.
If Mercedes’ treatment of Chrysler is any indication, then perhaps we need to start a Todesuhr (if that’s the right word) for Mercedes then. Karma’s a mo-fo, isn’t it?
Phu…leeze,let this be an untrue rumor! Today, when even the Detroit mass-producers reluctantly have come to the conclusion that the product is everything (or at least I hope they have), BMW bean counters (allegedly) start thinking grand thoughts on mergers, acquisitions and all kinds of financial arrangements. Doesn’t history teach them anything? Give med just one merger between “equals” in the auto industry that has been successful. I would have thought that BMW’s very recent experience in this venue would keep them away from such follies! This is a guaranteed recipe for disaster. There is room in this world for manufacturers who deliver a (perceived?) superior product, at a somewhat higher price, believe me! You don’t have to be the biggest to be be best,au contraire. Management would take their eyes off the product for the next few years to iron out organizational issues, and suddenly BMWs wouldn’t be so hot anymore. Lots of people already feel the proliferation of the brand in the US and UK is threatening the magic, so what if they managed so sell even more cars, featuring even more car lines? No, stay on your course, that is the only way to assure continued success in the marketplace. Mercedes have their following, and BMW have theirs, and never the twain shall meet (I hope!).
I wonder if this has anything to do with the EU’s new carbon-dioxide regulations? If I recall correctly, many of the higher end automobile manufacturers were concerned that they wouldn’t be able to meet the regulation levels. Hence, I believe, the Porche-Audi-VW tie-up – Porche can use the fairly efficient VW models in it’s average if that all goes through. Could the same be a motivation for a BMW-Mercedes link?
-S5
Profit margins at BMW and Mercedes have been falling the last few years. They both need to do something. This may well be it.
I think the German and EU antitrust regulators might have some problems with this. Don’t hold your breath.
Either it’s a slow news day or there a crackhouse under the Detroit News offices.
There’s no logic or synergy to uniting auto brands under one roof unless you start sharing platforms and buttons, very tricky to get right and death to a luxury brand. Development costs can be shared between companies by forming partnerships for individual projects. PSA are masters of this, BMW and MB are no slouches either.
The alternative is corporate bloat and badge engineering. Look at the sad fate of SAAB inside the horrible maw of GM and shudder.
It ain’t gonna happen. No way. German industry does not work like that.
Anybody want to make this interesting? 100 Euros on no merger till 2015.