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BMW, Hyundai in talks on engine development tie-up

ABR Staff Writer Published 07 May 2012

German luxury car maker BMW and South Korean motor company Hyundai are in talks for a comprehensive alliance to develop an engine and share the cost for the development, a source familiar to the matter told Reuters.

BMW is looking at an option to provide EUR1-2bn ($1.3bn-$2.6bn) to the cost of developing new engine families, reports the news agency citing German industry newsletter Automobil Produktion.

Hyundai Motor Group chairman Chung Mong-koo's son Chung Eui-sun and BMW managers had a small meeting in Munich, which was denied by a Hyundai Motor spokesman saying it is groundless.

The potential collaboration could help Hyundai gain access to BMW's gasoline engines, while allow BMW achieve economics of scale, according to Park Sang-won, an analyst at Eugene Investment & Securities.

BMW in the first quarter of this year indicated that it was working on a new engine architecture which it claims would improve economies of scale for its three, four and six-cylinder petrol and diesel engines.

Dampening the speculation of talks with Hyundai, BMW chief executive Norbert Reithofer said BMW is in talks with General Motors on future technologies and may extend cooperation with PSA Peugeot Citroen on gasoline engines, adding that further co-operation partners are currently not foreseen.

BMW and Toyota will work for green car technology under which the German premium car maker will supply diesel engines to Toyota from 2014.