If Automotive News' sources are to be believed, BMW and Mercedes-Benz might be joining forces to develop a new front-wheel drive architecture that would underpin both automakers' compact offerings. BMW is likely in the process of developing a new platform for its MINI and Mercedes has already announced plans to ditch its A-class ultra-compact. The idea that the two rivals would come together to co-develop a product might seem preposterous, but at the end of the day, it's all about saving as many euros as possible.
If a joint effort does take place, expect Mercedes to use its own powertrains for two compact vehicles, likely new A- and B-classes. And no, Chrysler isn't in the running to help out.
[Source: Automotive News – Sub. Req.]