Honda website
Honda website

APRIL 19, 1999

...but is BMW a target?

BOTH Ferrari's parent company Fiat and the massive Volkswagen empire are poised to make new acquisitions to strengthen their positions as the world's automotive industry consolidates. Rumors in Italy say that Fiat is after BMW, having been beaten by Ford in the bidding to buy Volvo. Fiat's managing-director Paolo Cantarella refuses to comment on the stories, saying only that BMW is "an interesting company with interesting products."

Last week Volkswagen announced that it was increasing its capital by another $10bn and industry analysts have concluded that this can only mean that the German firm is planning to add to its impressive portfolio of automobile brands, which currently includes Volkswagen, Audi, Seat, Skoda, Bentley, Lamborghini, Bugatti and Cosworth.

Volkswagen has shown some interest in BMW in recent months and may offer a share swap and money to convince the Quandt Family, which controls BMW, to exchange the Munich firm for a shareholding in the much larger VW. The QuandtÊFamily is not expected to sell to a non-German company. In addition to the BMW brand, the Munich firm owns the Rover Group, which has the rights to the Land Rover, Mini and MG brands. BMW's British offshoot is currently losing money fast.

Volkswagen and BMW were in competition last year to buy Rolls Royce Motor Cars. Volkswagen won but BMW - which owns Rolls Royce Aero Engines - negotiated a deal by which it kept hold of the Rolls Royce name and can begin producing Rolls Royce vehicles. A merger between BMW and Volkswagen would give VW complete control of all the Rolls Royce companies.