Mercedes-Benz and BMW have spent a long time as rivals. However now, talks between the 2 automakers recommend that Mercedes may quickly purchase four-cylinder engines from BMW, in accordance with 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 automobile enterprise slipped to three.2 % within the second quarter, and gross sales within the first half of the 12 months dropped to 900,000 items—the bottom since 2020. Källenius instructed his administration group that cost-cutting measures gained’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 value. However in key markets just like the U.S., utilizing Chinese language-built engines has develop 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 keeping with Supervisor Magazin, Källenius first raised the concept with BMW CEO Oliver Zipse almost a 12 months in the past. Since then, technical groups led by Markus Schäfer (Mercedes Board Member) and Joachim Submit (BMW Board Member liable for R&D) have been allegedly engaged on particulars. The plan may see BMW provide engines to Mercedes beginning in 2027, with manufacturing at BMW’s plant in Steyr, Austria. That manufacturing unit constructed greater than one million engines in 2024.
The preliminary step would give attention to BMW’s four-cylinder petrol engine, although diesel items and different drivetrain parts may observe. Insiders say that joint manufacturing within the U.S. can be being thought of to keep away from tariffs.
A Shift in Mercedes’ Engine Technique
For Mercedes, the deal would mark a serious 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, extra income, and a lift in popularity if even its primary competitor chooses BMW engines.
BMW already provides powertrains to a variety of carmakers. Smaller corporations comparable 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 checklist could be a unique sort of milestone. Supplying engines to a direct rival would each safe enterprise at Steyr and spotlight BMW’s international popularity for engine design.
Open Questions About Scope and Timing
Precisely how far the cooperation may go remains to be unsure. Present talks seem to give attention to BMW’s B48 petrol four-cylinder, however the B47 diesel may observe. Which Mercedes fashions could 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]
