Benz meets BMW

What does it say about our world when our automakers are better able to share inforomation then our government agencies? That said, this is a financial blog and not a political one. Irony, all of this good German good will is spurred by the Chinese.

BEIJING (AP) -- Daimler AG, the maker of Mercedes-Benz cars, is discussing sharing components and technology development with rival BMW AG, Daimler CEO Dieter Zetsche said Sunday.

The luxury automakers see each other as direct competitors and the possibility of cooperation reflects the intense pressure on automakers to cut costs amid slow sales growth in the United States and Europe. "We are discussing potentially sharing components. And this might make sense specifically in regard to new technologies," Zetsche told reporters at the Beijing auto show.

Daimler, based in Stuttgart, and BMW, in Munich, might consider jointly investing in basic research but no agreements have been reached, Zetsche said. He gave no other details.

China, the world's second-largest auto market, has been a bright spot for Daimler and other automakers, with overall sales forecast to grow at least 15 percent this year. U.S. sales are expected to decline this year, while those in Europe and Japan are flat.

In China, Daimler says its first-quarter sales soared 42 percent from the same period last year to 8,661 vehicles. The company says China is the No. 2 market for its S-class sedans after the United States, accounting for one-third of sales.

If this sticks this will be big news on the international equities market. Much like the airlines environment of M&A, this is a tech version on the other side of the world. The ability to take advantage of economies of scale is bound to cut overhead cost, for both manufactures; the question is will each manufactures be able to maintain its own unique identity. As you may recall Dodge and Mitusbschi did this is the mid 90s and both suffered.