Fiat, BMW look at Alfa Romeo-Mini cooperation

By Christiaan Hetzner and Giancarlo Navach

FRANKFURT/BALOCCO, Italy (Reuters) - BMW AG (BMWG.DE), the world's largest premium carmaker, could help Italy's Fiat SpA (FIA.MI) launch its Alfa Romeo brand in the United States as the two also discuss developing the Mini.

While Fiat has partnered with the likes of Tata Motors Ltd (TAMO.BO) and Ford Motor Co (F.N) to build vehicles, the move represents a departure for BMW, which has so far only agreed to cooperate with rivals such as PSA Peugeot Citroen (PEUP.PA) and Daimler AG (DAIGn.DE) in the fields of engines or hybrids.

"We are currently examining with the Fiat Group possibilities for the joint use of components and systems in Mini and Alfa Romeo vehicles in order to achieve economies of scale," BMW management board member Friedrich Eichiner said in a statement.

"As part of possible cooperation, BMW group will provide (Fiat) with support in launching the Alfa Romeo brand in the North American market," Fiat said in its version of the statement.

Fiat has committed to return the Alfa Romeo brand to the U.S. market and Chief Executive Sergio Marchionne has said he aims to start making the cars in North America between 2010 and 2011.

Possible cooperation between Fiat and BMW comes as many car makers seek alliances to share production and other costs in the highly competitive sector known for its meager profit margins.

"Everything is going in the wrong direction for the industry: adverse currency effects, higher raw materials prices which have so far been impossible to pass on to customers, and now a much weaker European market," Deutsche Bank analyst Gaetan Toulemonde said.

Both BMW and Fiat had reportedly been in separate talks with Daimler over possible joint development of small cars with Mercedes-Benz, but negotiations yielded no results.