Right now luxury carmakers are doing booming business, and rivals BMW and Mercedes are faring better than ever. Both auto manufacturers produce in excess of one million vehicles annually, and profits are coming in by the fistful. At the same time, Audi is growing faster than both luxury stalwarts, and with 22 models coming in the next couple years, the gap may between No. 3 and the perennial Big 2 German luxury autoamakers may shrink even faster. One reason for Audi's pace is that the folks from Ingolstadt can pool engineering and parts resources with VW, Porsche, and even Lamborghini, giving the luxury maker flexibility to produce more products using less money.

A very competitive market is pushing Mercedes and BMW to work together to find those same synergies, and plenty exist. BMW sales and marketing chief Michael Ganal points out that both companies are premium car makers with a lot of money vested in high tech, and combining resources on some projects will help both companies ultimately remain independent. The two are already working with GM and Chrysler on hybrid powertrains, for instance. Automotive News reports that Ganal didn't go into details concerning any partnerships, but we're hoping they do work together to find a new supplier for their unintuitive navigation systems.

[Source: Automotive News -sub. required]