BMW & Mercedes In Merger Talks!!

German rivals BMW and Mercedes-Benz are allegedly considering a merger to help them survive the credit crunch.

Earlier reports suggested that Daimler (which owns Mercedes) and BMW have been talking about component and part sharing since 2009, but now a German magazine claims the two premium carmakers want to take a stake in one another.

Both companies have suffered a massive drop in sales and some sort of tie-up could strengthen their position in the current volatile economic climate.

A merger could also lead to a new generation of jointly-built small cars, blending both Mercedes and BMW expertise.

It's possible that the next Mini and Mercedes A and B Class could be developed and built on the same platform, cutting costs for both companies.

But the Quandt family - who own BMW - are understood to be against the merger, fearing an aggressive takeover bid by Daimler.