BMW-PSA (Peugeot-Citroen) Partnership

Currently, BMW and PSA are connected via the Mini. The Mini's four-cylinder engines were joint a venture development between the two companies. The recent announcement of enhanced ties between Daimler and Renault-Nissan has increased speculation that BMW and PSA might extend their partnership, but so far the companies do not seem to be moving in that direction.

"We are looking at cooperation opportunities step by step and project by project," explained BMW chairman Norbert Reithofer at the Geneva auto show. "Of course it could make sense to develop the next Mini together with PSA. But the key question is who do you put in charge of what. In terms of R&D activities, it is very difficult for a premium brand to farm out the work. We went down this avenue twice, but in neither case did the car in question drive quite like the Mini counter-proposal done in-house. That's why it makes more sense to pair the next Mini with the new front- and all-wheel drive BMW architecture, which will form one part of the revised 1-series range. That way, we can exactly determine the character of both model ranges, and at the same time we can still achieve considerable economies of scale. If a potential partner likes what our engineers have come up with, we may be prepared to talk about an extension of the portfolio..."

PSA may eventually join forces with BMW for such efforts as new three-cylinder engines, compact dual-clutch gearboxes, and advanced AWD modules. Project i (BMW's megacity car and its ultra-compact siblings) would quickly attract numerous takers, but BMW seems determined to keep the know-how to itself. This applies in particular to the low-cost carbon-fiber structures, the new high-performance three-cylinder engines, and the patented wheel hub motors in combination with the advanced supercapacity storage elements.

"In addition, the Project i team has created the metro scooter, which will set new standards in terms of comfort, maneuverability as well as active and passive safety," claims a source from advanced engineering. "While the BMW brand will get a zero-emissions version powered by a new micro motor fed by powerful compact batteries, the Mini brand is to market a sportier and more youthful gasoline-engine city scooter. Again, we may at some time in the future consider a cooperation with another brand, but right now it is an essential precondition that Project i is defined and cultivated wholly in-house."

Long-term, however, BMW and PSA may indeed move a lot closer together. The brands are on converging trajectories. PSA has decided to climb up-market, and the resulting need for more sophisticated engineering moves the French brands almost automatically a little closer to their Bavarian counterparts. And as for BMW, the purists may hate it, but the 1-series eventually will switch completely to FWD/AWD, and 3-series could very well follow suit.

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