BM-Benz?

Germany's two prestige car brands, BMW and Mercedes-Benz, are stepping up plans to share research and manufacturing as they seek ways to cut costs during the economic downturn, a German newspaper reported Sunday.

All cooperation was conceivable provided it was not noticeable to customers or detrimental to the two unique brands, senior executives were quoted as saying by the Frankfurter Allgemeine Sonntagszeitung.

BMW, based in Munich, and Daimler, the Mercedes-Benz maker based in Stuttgart, have been in talks for years on pooling resources, but such moves have been obstructed by engineers opposed to using the arch-rival's technologies, the newspaper said.

Day by day, the pressure of costs was overcoming that resistance, the newspaper added. It said the first contracts were ready to sign, but the two companies were not planning any cross-shareholding in one another.

Premium cars have suffered a sharp downturn in world sales.

A Daimler spokesman responded Sunday that the company would not comment and everything that had to be said would be announced on Tuesday by senior executives at an annual financial-results news conference.

At BMW, a spokesman said the talks were public knowledge and 'not new,' but he denied there had been any new concrete outcome to the talks. He said the two groups were already jointly developing hybrid power units and conducting joint purchasing of components.

Those components were out-of-sight items under the skin of the cars such as air-conditioner parts or seat-belt-tension springs.