Bayerische Motoren Werke AG is in talks to cooperate with rival Daimler AG’s Mercedes unit to develop and assemble engines, axles, steering gear or drive systems. Both the manufacturers are trying to cut costs and make small cars for a host of reasons like CO2 emissions, fuel efficiency and increase in volumes. BMW has set an internal cost-savings target of 8 billion euros while Mercedes adopted the CORE cost cutting strategy. Merging of the two German automotive magnates would lead to a lot of interesting news which will closely be tracked by us in the following months.