Mercedes-Benz has ended talks with Fiat on the establishment of a joint venture for the production of a new range of small cars. According to Autocar sources, Mercedes-Benz analysts considered the cost advantages of a co-operation with Fiat were too slim following weeks of internal studies aimed at seeing the next-generation A-class and B-class models twinned with cars such as the future Punto and Bravo.“The Italians produce small cars at a greater cost than we do,” a senior Mercedes-Benz manager said.As part of the cost cutting CORE program instigated by chairman Dieter Zetsche, Mercedes-Benz has been actively seeking a partner to share the costs of developing a successor to its existing entry level A-class line-up, and had been banking on Fiat’s expertise in the small car segment to bring a major boost in efficiency.However, differences in engineering and quality are said to have been at the root of problems that has seen the German car maker break off official talks with Fiat.The move once again opens up the possibility of a link up between Mercedes-Benz and long time rival BMW – both of which are seeking partners in a bid to reduce the cost of small car production.BMW chairman, Norbert Reithofer, has confirmed contact between the two car makers at board member level but insists no firm details have yet been discussed.One distinct possibility, according to industry analysts, is Mercedes-Benz being brought into the four-cylinder engine program established between BMW and Peugeot. There has also been speculation that the next-generation Mini and A-class could share a basic front-wheel drive platform architecture.
