BMW may co-operate with rival on Mini

BMW IS examining whether to share platforms with French rival PSA Peugeot Citroën for its Mini small car, it emerged yesterday, as the German premium carmaker returned to profit in the second quarter on the back of cost-cutting.

Norbert Reithofer, BMW’s chief executive, said BMW was talking to Peugeot about a deeper co-operation, but he refused to give any details. Industry insiders said, however, that the carmaker was in “preliminary talks” about a future shared platform for the Mini model family, which the carmaker aims to expand.

In addition, the two carmakers are looking at ways to share modules – components that can be used in different car segments – for BMW’s main brand.

The move marked a swift strategic foray by Philippe Varin, Peugeot’s chief executive, who joined the French carmaker in May and since then has met Mr Reithofer twice.

Volume and premium carmakers have been looking at ways to co-operate in order to increase economies of scale in a competitive car market that has been faced with a sharp downturn this year.

The implications of such a future co-operation for Mini’s “production triangle” of three plants in the UK remained unclear, as the talks are at a very early stage.

Mini has stepped up production and rehired 250 agency workers at its Oxford plant as state-sponsored scrapping incentives have triggered rising demand for small cars.

BMW and Peugeot declined to comment. But Mr Varin said last week that the company was “open to studying other alliances or co-operation programmes”.

Peugeot and BMW some years ago jointly developed 1.4 and 1.6 litre petrol engines for use in small and mid-size cars. BMW uses them in its Mini range.

The news came as BMW said it countered an 18 per cent sales drop in the second quarter when it generated a €121 million net profit in the same period.

This followed a loss in the first three months of the year and compared with a €507 million profit in the second quarter of 2008. – (Copyright The Financial Times Limited 2009)