BMW, the Munich-based German automaker, is reportedly in discussion with other automakers -- rivals in some cases -- to sell their engines and transmissions. Klaus Draeger, BMW's head of development, told Auto Motor und Sport that the automaker is in advanced talks with Mercedes-Benz about licensing engines to its Stuttgart-based competitor.

Specifics have not been announced, but one likely candidate would be BMW's new V-12, set to debut in the new 7 Series and baby Rolls-Royce sedan. Mercedes would drop it under the hood of their flagship S-Class and Maybach. There was no mention about the possibility of BMW's twin-turbo inline-six finding itself under the hood of a Mercedes (while BMW continues to refine their award-winning inline-six powerplant, Mercedes dropped their popular straight-six in the mid-1990's and replaced it with a V6), but Draeger did hint that other automakers have approached the company about diesel engine technology. Engine and transmission sharing isn't uncommon in the industry, but such a move would be a first for the two companies, each longstanding rivals with products selling in the identical segments.

[Source: Autocar]