Mercedes-Benz May Use BMW Engines Starting 2027: A Historic Partnership in the Making
For decades, Mercedes-Benz and BMW have been two of the fiercest rivals in the automotive world. Both brands symbolize German engineering, premium performance, and luxury. Yet, according to a recent report by Manager Magazin, these competitors are now exploring a surprising collaboration: Mercedes-Benz may start equipping its vehicles with engines produced by BMW. If negotiations proceed as planned, deliveries of BMW-built powertrains to Mercedes-Benz could begin as early as 2027.
This would mark one of the most remarkable partnerships in the history of the automotive industry, potentially reshaping strategies for both carmakers in a rapidly evolving market that is shifting toward electrification, hybridization, and cost efficiency.
What Engines Are Being Considered?
Insiders report that the initial focus of the agreement is on a four-cylinder petrol engine, which Mercedes-Benz plans to integrate into its next-generation hybrid powertrains. These units would help the Stuttgart-based company expand its lineup of plug-in hybrids, meeting growing demand for fuel-efficient models in Europe, the Middle East, and Asia.
However, discussions reportedly go further:
Possible supply of diesel engines, still in demand in several European and emerging markets.
Supply of transmission components, which could reduce costs for both companies.
Potential joint production of powertrains in the United States, aimed at avoiding tariffs currently applied to imported engines and transmissions.
Where Will BMW Build the Engines?
If the partnership goes ahead, production is expected to be based at BMW’s long-standing plant in Steyr, Austria. This facility has specialized in engine production for decades and is capable of manufacturing a wide range of petrol and diesel powertrains. It already produces engines for BMW, MINI, and Rolls-Royce, making it a natural choice for expanding into Mercedes-Benz supply.
Why Is This Partnership Happening Now?
The driving factor is economics. Both companies have faced significant profit declines in the first half of 2025:
Mercedes-Benz has suffered more heavily, with margins pressured by high R&D spending on electric vehicles and slowing demand in China.
BMW also reported a noticeable drop in profitability, though it weathered the downturn better.
By sharing engines, the two companies could:
Cut costs through economies of scale.
Boost revenues by opening new supply chains.
Reduce investment risks, especially in the transition era between combustion, hybrid, and fully electric vehicles.
This kind of collaboration is not new to the automotive world. Toyota and BMW have long shared technologies (most famously with the Toyota Supra and BMW Z4), while Renault, Nissan, and Mitsubishi share powertrains and platforms. Yet, for Mercedes-Benz and BMW, whose rivalry is legendary, the move would be groundbreaking.
Technical Outlook: The Four-Cylinder Hybrid Base
Although exact specifications of the discussed engine remain under wraps, Mercedes-Benz will likely adapt BMW’s modular four-cylinder petrol unit into a hybrid-electric system. The expected technical highlights include:
- Displacement: Around 2.0 liters.
- Configuration: Inline-four, turbocharged.
- Output Range: 190–300 horsepower (depending on tuning and hybrid boost).
- Hybrid Integration: 48V mild-hybrid system or plug-in hybrid with 15–30 kWh battery.
- CO₂ Emissions: Targeting compliance with Euro 7 and future EU regulations.
If successful, this engine could become a backbone for a wide range of models — from compact sedans and SUVs (such as the Mercedes C-Class and GLC) to mid-size hybrids that dominate urban rental markets in regions like Dubai, Abu Dhabi, and Europe.
What Does This Mean for Car Rental in Dubai?
For car rental companies in the UAE, the collaboration could bring significant benefits:
Lower running costs: Efficient four-cylinder hybrids reduce fuel consumption.
More availability: Increased production capacity ensures more models reach global fleets.
Advanced technology: Customers gain access to next-generation hybrids combining BMW’s proven engineering with Mercedes-Benz’s luxury.
Variety in fleet: Rental operators may soon offer hybrid Mercedes models equipped with BMW engines, appealing to tourists seeking both prestige and eco-friendliness.
In Dubai, where car rental demand is booming, customers already enjoy models like the Mercedes-Benz C-Class, BMW 3 Series, and premium SUVs such as the GLE and X5. A shared engine strategy could make hybrid options more affordable for both operators and drivers.
Could Diesel Return?
Although the focus is on petrol-hybrid powertrains, insiders say diesel engines are also being considered. While diesel has lost favor in Western Europe due to emissions scandals and regulatory bans, it still plays a role in markets like Eastern Europe, the Middle East, and parts of Africa. A high-torque BMW diesel powering a Mercedes SUV could make sense for fleet operators in regions where long-distance fuel economy matters.
The Strategic Future: Joint US Production
One of the most intriguing aspects of the talks is the possibility of joint powertrain production in the United States. If Mercedes-Benz and BMW were to establish a shared facility, they could:
Avoid import tariffs.
Secure local supply for the massive North American market.
Potentially supply engines for locally built SUVs, a key growth segment.
This would represent a deeper integration of the two rivals than anyone would have imagined just a few years ago.
While Mercedes-Benz and BMW remain competitors in showrooms and racetracks, behind the scenes both face the same challenges: stricter emissions laws, shifting customer demand, and rising production costs. By working together on engines, they can preserve profitability while continuing to invest heavily in the electric future.
For consumers — and especially car rental customers in Dubai and Abu Dhabi — this partnership could mean more efficient, affordable, and technologically advanced vehicles on the road by the end of the decade.
