BMW to cut spending by $5.2 billion by 2012 as a result of Mercedes-Benz partnership

BMW, the world’s largest luxury automaker, is own its way to significantly reduce spending on components and suppliers by 4 billion euros ($5.2 billion) by 2012. The cut in spending will come with some assistance from a partnership with Daimler AG’s Mercedes-Benz unit, BMW’s closest rival.

Herbert Diess told Bloomberg that talks between BMW and Mercedes-Benz have yielded new projects over the past several months that will help both companies cut spending by about 100 million euros a year by 2012.

BMW is looking to lower costs by helping component suppliers improve efficiency as well as develop systems, such as start/stop technology, that they may be able to sell to other manufacturers. “We”ll never be able to lower costs just through volumes,” Diess said.

He said that new projects with Mercedes-Benz “will lead to significant savings as well as technical advances.

– By: Omar Rana

Source: Bloomberg