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Daimler small-car talks
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October 18, 1999: 9:47 a.m. ET
Carmaker has no comment on collaboration with Peugeot, Fiat
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LONDON (CNNfn) - DaimlerChrysler is holding talks with both Peugeot of France and Fiat of Italy on collaboration in developing a small car that could lead to the German-American automaker taking a stake in any eventual partner, according to a report Monday.
The Stuttgart-based company has held extensive talks with both manufacturers and a decision on the choice of partner could come before Daimler's board meets in early December, according to a report in the German business daily Handelsblatt.
Daimler favors a cross-shareholding as part of the agreement, as it would give the company more control over any venture. Any simple collaboration, involving the exchange of components, has less appeal as it would only make the group dependent on its partner.
There is a very real possibility that Daimler will end up with " a significant stake" in either Peugeot or Fiat, the newspaper reported, citing a source on Daimler's board.
A spokesman for DaimlerChrysler refused comment on the report to CNNfn.com. "This is pure speculation and we never comment on speculation," he said.
DaimlerChrysler is under pressure to cut the average gas consumption of its product line, a part of a commitment by all German carmakers cut consumption by 2008. 
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