The latest from Autocar.com is that BMW is in talks to buy Fiat for £3.2bn.
The company is said to be interested in buying Mercedes-Benz, the German carmaker which has a huge brand recognition but has fallen badly short of market expectations in recent years.
BMW’s deal to buy Mercedes could be worth as much as £3bn.
The German automaker has been looking to reduce its reliance on the US, where its production plants have been moved from Detroit to Mexico.
In March, BMW announced that it was reducing the number of assembly plants from its current 10 in Europe to seven, including in Hungary, Poland and Romania.
According to the Financial Times, BMW’s strategy to cut costs has also resulted in a sharp drop in profit margins.
The new deal would be an important step for BMW in a world where it has been forced to cut its profit margins by 40% over the last two years.