Auto News 5

Size matters in the auto industry. Bigger automakers can cut better deals with suppliers and can subsidize expensive technologies. Here, BMW finds itself at a distinct disadvantage. Audi can rely on the Volkswagen Group for economies of scale, and Mercedes-Benz has engineered deals with Renault and Nissan/Infiniti. BMW has looked for ways to increase volume on its own. It has entered just about every market segment and invented a few more (5-series Gran Turismo, anyone?). It is also exploiting Mini for all it's worth; as we've reported, the two brands will share a front-wheel-drive architecture and several engines going forward. However, it's unclear how much more BMW can squeeze out of luxury vehicles and a kitschy British brand. Although the carmaker keeps posting record sales, the bottom line does not shine quite so brightly anymore because fleet sales and price wars are taking their toll. The Bavarians need a bigger partner. Much bigger.