While BMW confirmed yesterday to reporters that talks with Fiat Group are still ongoing, this morning German media reports emphatically claim that the discussions, which centre around proposed co-operation between the firms’ niche Alfa Romeo and MINI brands, have come to an unsuccessful conclusion.  The report comes in this morning’s edition of respected German daily newspaper Handelsblatt, which says in an in-depth front page article that the talks have “failed” and that BMW must now find a new partner to develop the next MINI model.

Last July, Fiat and BMW announced that they were in talks. The remit would see the two firms co-operating in the areas that could be used to reduce costs of the next-generation MINI vehicles and smaller Alfa Romeo models, with common platforms, powertrains and general components being the focus. BMW has long been looking to find a partner to help it reduce the cost of developing the next MINI, and has also been in talks with German rival Mercedes-Benz. There were suggestions that the discussions with Fiat was being used by BMW to push other potential partners into a deal. It was also revealed in a statement last July that BMW would help Alfa Romeo in its ambitious plans to re-launch in the United States by selling the new B-segment Alfa MiTo coupé through selected outlets in its MINI dealer network.

Handelsblatt says that while BMW wanted to focus solely on creating co-operation in the area of small platforms to underpin the next MINI, Fiat entered the talks with the focus of initiating a much wider alliance and developing closer co-operation between the two carmakers. Since the talks between Fiat and BMW began last summer the climate in the car industry has changed, with the severe global recession forcing car manufacturers to change their strategies. Fiat has postponed plans to introduce the Alfa Romeo brand into the United States and a new alliance it plans to enter into with Chrysler LLC renders the plan to sell the Alfa MiTo through MINI dealerships stateside redundant.

According to Handelsblatt, BMW is concerned that an alliance with a mass car manufacturer such as Fiat could damage its image, and the memories of its decision to purchase the UK carmaker Rover in 1994 are still fresh and painful in Munich. BMW thus reportedly sees co-operating with Mercedes-Benz, which is itself looking for a fresh route for its next-generation A-Class, as its preferred method of cost-saving for the next MINI. This would build on a year-old co-operation that is seeing the two German firms coming together to develop hybrid powertrains. BMW also has a successful alliance in the area of engines with French firm PSA Peugeot-Citroën.