According to Autocar, Mercedes-Benz and BMW are negotiating a cooperation agreement in which BMW's 2.0L four-cylinder turbocharged engine could appear in a variety of Mercedes models - from the CLA compact sedan, GLA SUV to larger models like the E-Class.
The report even suggests that the two companies could jointly build a joint engine manufacturing plant in the US.
However, at the IAA Munich exhibition, Mr. Markus Schaefer - Chief Technology Officer and member of the Board of Directors of Mercedes-Benz - completely denied:
'No way. We have developed a new family of modular engines called FAME (Family of Modular Engines), which covers the entire displacement range, and meets EU7, China 7 and US emission standards.'
Competitive – cooperative relationship
Mercedes and BMW have been longtime rivals in the luxury car industry, but this new report suggests a possible technical collaboration. If the deal goes through, Autocar sources say Mercedes could make an official announcement before the end of 2025.
Potential models using BMW engines mentioned include:
- Compact SUVs: GLA, GLB
- Sedans: CLA, C-Class
- Midsize cars and large SUVs: E-Class, GLC
- Even the upcoming 'baby G-Wagen' SUV
Why Mercedes Considered
The biggest benefit for Mercedes is immediate access to a Euro 7-compliant engine that can be integrated into plug-in hybrid (PHEV) powertrains without additional R&D budget.
Meanwhile, the new 1.5L turbocharged engine introduced in the CLA Hybrid is not ready for use in a traditional PHEV or as a range-extender.
The engine Mercedes could use is the BMW B48, a 2.0-liter turbocharged four-cylinder that is popular in many BMWs and Minis. It is currently produced in Steyr, Austria, but there is also a possibility that the two companies could collaborate on a manufacturing plant in the United States.
Electric Vehicle Industry Landscape
The rumor comes at a time when Mercedes-Benz is struggling in the electric vehicle segment. All six of its electric vehicle (EV) models in the US are expected to see a sharp decline in sales in 2024.
Mercedes is even preparing to temporarily close the order books for the following models:
- EQE sedan
- EQE SUV
- EQS sedan
- EQS SUV
This shows that Mercedes's strategy of switching to electric vehicles has not met expectations, forcing the company to be flexible in its hybrid engine solutions.
In short, Mercedes-Benz denies using BMW engines, affirming that it will continue to develop its own FAME engines. However, the spread of rumors also clearly reflects the pressure Mercedes is facing when the electric vehicle market does not grow as expected.