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BMW, Daimler parting ways on hybrid partnership?

Thanks to the global economic meltdown, cost cutting is now at the forefront of the automotive industry, but a new report indicates BMW and Daimler - the parent company of Mercedes-Benz and Smart - could be parting ways on their hybrid partnership.

BMW and Daimler have been co-developing hybrid systems for the past few years, but, according to Germany's Auto Motor und Sport, BMW is considering cutting ties with Daimler on its hybrid joint-venture. An insider revealed to the German publication that BMW may have found a better opportunity with another automaker.

Although BMW may be looking for an exit, Daimler reportedly wants to keep the partnership with its cross-town rival. The partnership has enabled Mercedes to bring such vehicles as the S400 Hybrid and ML450 Hybrid to fruition, and the German automaker feels there is still more to be gained - especially in the realm of cost cutting - from the close relationship.

But BMW may be balking at Daimler's new-found commitment to pure electric vehicles. Although BMW has its fair share of EVs planned, Daimler is reportedly keen on skipping over hybrids and moving directly to electric power. Such a move would leave BMW with the bulk of the hybrid development responsibilities and could be the reason the automaker is searching for a new partner.