Mercedes and BMW news - BMW and Merc to join forces?

Are no rivalries sacred? We've always liked to think of Mercedes and BMW as locked in an eternal pitched battle, shelling each other's trenches and mounting dawn raids over the Schwarzwald. 

But it seems the reality is closer to a cosy candlelit dinner over a couple of glasses of Gewurtzstraminer, as it looks increasingly probable that arch-nemeses BMW and Merc will join forces to build their small cars.

Michael Ganal, BMW's sales and marketing head, suggested last month that his company was looking at expanding cooperation with Mercedes, leading to speculation of a full-scale tie-in between the two German firms.

But our BMW spokesman denied this was a possibility, saying that while BMW and Merc were already working together on a number of technologies - including hybrid powertrains - there were no set plans to expand this.

However, German sources have today suggested that Mercedes may work with BMW to produce the next-generation A-Class on the Mini platform from Beemer's Oxford factory. 

Such a deal would make financial sense for BMW, which has to run the Oxford factory at full capacity to turn over a profit. But a Mercedes spokesman today denied that there were plans in place to expand hybrid partnership with BMW. 

Better keep the Gewurtzstraminer on ice, boys.