With much of the running for greater collaboration between BMW and Daimler coming from Stuttgart, some analysts believe that BMW's reluctance to get closer to its arch-rival is misplaced.

CEO Norbert Reithofer keeps stressing the importance of BMW's independence as a car manufacturer.

But BMW should be looking to deepen its relationship with Daimler according to analyst Sabine Blümel at Creative Global Investments.

Speaking exclusively to just-auto, she maintains that there are good reasons why the two should work more closely together.

"Close cooperation between BMW and Daimler should be win-win," she says.

"We see benefits without taking out capacity. Our reasoning is that the brands of the two manufacturers are clearly defined in the global marketplace. Both manufacturers are in need of more economies of scales and synergies, in particular in R&D and are among OEMs closest in terms of corporate culture and identity."

Although talks between Daimler and BMW continue, it has become increasingly obvious that a co-operation will be strictly limited to joint procurement of bulk components that are not visible to the customer, according to Blümel's analysis.

However, she would like to see more.

"We believe that meaningful cost-savings will only be achievable if the cooperation also includes R&D, engineering and possibly financial service operations. We understand that Daimler has been much more proactive and that BMW is more reluctant."

She says that CEO Reithofer is concerned that a deeper cooperation with Daimler, such as developing engines for its core models could damage the identity of the group's brands. BMW has been looking among volume makers for cooperation opportunities on the next Mini (to be introduced 2013).

Blümel is perturbed by this approach.

"We believe that BMW is over-protective for its core products; and not brand-conscious enough in the smaller car segments, where premium branding is a relatively new phenomenon and a sustainable pricing premium much more difficult to achieve.

"We believe that the different brand identities of BMW and Mercedes-Benz are clearly defined in the global marketplace and that a clear distinction in powertrain and handling characteristics can be maintained even in deeper cooperation."

She also highlights another strategic issue on the competitive landscape.

"Once the planned merger between Porsche and the VW group is completed, BMW will be effectively the only independent premium manufacturer - Mercedes is part of a big group - making BMW even more vulnerable to an Audi brand that is benefiting from being part of the VW group,"  Blümel maintains.

And times will remain tough for premium manufacturers when the upturn comes, she believes.

"We see the greatest challenge for premium manufacturers to be able to charge premium prices and generate premium margins even in the brave new world of a post-crisis car market."

Dave Leggett