Mercedes-Benz and BMW have spent many years as rivals. However now, talks between the 2 automakers counsel that Mercedes might quickly purchase four-cylinder engines from BMW, based on a report by Supervisor Magazin and unconfirmed by BMW as of now.
Mercedes’ Struggles Immediate a Rethink
On the finish of July, Mercedes CEO Ola Källenius reported weak monetary outcomes. Margins within the automotive enterprise slipped to three.2 p.c within the second quarter, and gross sales within the first half of the yr dropped to 900,000 items—the bottom since 2020. Källenius informed his administration crew that cost-cutting measures received’t assist if the correct merchandise are lacking.
One of many issues is engines. Mercedes wants extra combustion items for plug-in hybrids than initially deliberate. Earlier, the corporate had turned to Geely in China to supply four-cylinders at a decrease price. However in key markets just like the U.S., utilizing Chinese language-built engines has change into politically troublesome. That’s why Mercedes is now allegedly exploring cooperation with BMW. We reached out to BMW AG for a touch upon this.
How the Cooperation Might Work
In line with Supervisor Magazin, Källenius first raised the thought with BMW CEO Oliver Zipse almost a yr in the past. Since then, technical groups led by Markus Schäfer (Mercedes Board Member) and Joachim Publish (BMW Board Member chargeable for R&D) have been allegedly engaged on particulars. The plan might see BMW provide engines to Mercedes beginning in 2027, with manufacturing at BMW’s plant in Steyr, Austria. That manufacturing facility constructed greater than one million engines in 2024.
The preliminary step would deal with BMW’s four-cylinder petrol engine, although diesel items and different drivetrain parts might observe. Insiders say that joint manufacturing within the U.S. can also be being thought-about to keep away from tariffs.
A Shift in Mercedes’ Engine Technique
For Mercedes, the deal would mark a significant change in route. Källenius had lengthy talked about phasing out combustion engines, however the firm is now taking a extra versatile method. For BMW, the advantages are clear: safe manufacturing volumes, further income, and a lift in fame if even its important competitor chooses BMW engines.
BMW already provides powertrains to a variety of carmakers. Smaller firms akin to Morgan and Ineos use BMW engines, however so do higher-volume manufacturers together with Land Rover, Vary Rover, and Toyota. Including Mercedes to that record can be a unique type of milestone. Supplying engines to a direct rival would each safe enterprise at Steyr and spotlight BMW’s world fame for engine design.
Open Questions About Scope and Timing
Precisely how far the cooperation might go remains to be unsure. Present talks seem to deal with BMW’s B48 petrol four-cylinder, however the B47 diesel might observe. Which Mercedes fashions can be the primary to obtain BMW energy, and when, additionally stays unclear. These particulars are anticipated to floor within the coming months if the negotiations are certainly true.
We’ll replace the article with BMW’s response to our inquiry.
[Source: Manager-Magazin]
