Mercedes mulls using Mini motors

FRANKFURT (Reuters) - Daimler AG plans to use four-cylinder direct injection engines developed by BMW's Mini brand and built by PSA in the next generation of Mercedes-Benz compact cars, a magazine reported.

Germany's Auto Bild, without citing sources, said Daimler intended to use the engines in the new B-Class compact from 2011. Cooperation would be confined to engines rather than complete compact car platforms from Mini, it added.

That meant prospects for using a Fiat platform for Mercedes compact cars had dwindled sharply, it said in the summary of a report to appear on Friday.

But Fiat Chief Executive Sergio Marchionne said a deal that Daimler might reach with one manufacturer did not necessarily exclude deals that it could make with others.

"The fact that it might have found an agreement with other suppliers does not mean that it is not interested in us," he told reporters at an event in Turin, home to the Italian automaker. "Mercedes needs a lot of engines, some of them from others and some of them from us."

Marchionne said on Oct. 11 that Fiat had been in touch with Mercedes about a possible alliance, as it had had with other manufacturers.

A Mercedes spokesman declined to comment in detail on the report, although he reiterated that the company was open for cooperation deals where they made sense.

"Mercedes is basically strong enough to implement future projects by itself," he said.

BMW declined comment.

The magazine said the next-generation B-Class would replace both the current A-Class and B-Class. It was planned to appear as three- and five-door models, a sport utility vehicle, a coupe and a convertible.

A final decision was due next month, it said.