Article: Daimler, BMW discuss sharing components

By JOE McDONALD

BEIJING (AP) — Daimler AG, the maker of Mercedes-Benz cars, is discussing sharing components and technology development with rival BMW AG, Daimler CEO Dieter Zetsche said Sunday.

The luxury automakers see each other as direct competitors, and the possibility of cooperation reflects the intense pressure on automakers to cut costs amid slow sales growth in the United States and Europe.

"We are discussing potentially sharing components. And this might make sense specifically in regard to new technologies," Zetsche told reporters at the Beijing auto show.

Daimler, based in Stuttgart, Germany, and BMW in Munich, might consider jointly investing in basic research but no agreements have been reached, Zetsche said. He gave no other details.

China, the world's second-largest auto market, has been a bright spot for Daimler and other automakers, with overall sales forecast to grow at least 15 percent this year. U.S. sales are expected to decline this year, while those in Europe and Japan are flat.

In China, Daimler says its first-quarter sales soared 42 percent from the same period last year to 8,661 vehicles. The company says China is the No. 2 market for its S-class sedans after the United States, accounting for one-third of sales.

On Sunday, Zetsche was joined onstage by Chinese film star Zhang Ziyi as Mercedes showed off its newest sport utility vehicle, the GLK, which goes on sale in China next year.

"We know it's a big, growing market" for such vehicles, Zetsche said.

Mercedes produces its midsize E-class cars and smaller C-class cars in China in a joint venture with a state-owned automaker. But Zetsche said it has no plans to respond to rising costs in Europe by exporting Chinese-made cars or components there.

However, he said, "tomorrow the situation might be different" as the quality of Chinese components improves.

Mercedes plans to add 20 new dealerships in China this year, raising the total to 120, said Ulrich Walker, the chairman of Daimler Northeast Asia Ltd.

Walker said Mercedes will start selling its two-seat Smart minicar in Beijing, Shanghai and other major Chinese cities next year. The company says the car is available in 37 countries.

The company also plans to start selling a gas-electric hybrid version of its M-class sedan in China late next year, Zetsche said.