BMW In Driver's Seat Of Rolls

Although Rolls-Royce Motor Cars PLC could still study a rival offer from Volkswagen AG, the luxury car company seems likely to pass into control of Germany's Bayerische Motorenwerke AG, putting the British auto industry entirely in foreign hands. Since BMW already provides Rolls-Royce with beefy German engines, gearboxes, and other technology, Rolls' British style basically is confined to marketing. Under BMW, Rolls' profitability is expected to rise dramatically with costs falling by 30% over the next 10 years. Life span of models would decline and volume increase under a strategy prepared by BMW chairman Bernd Pischetsrieder. Vickers PLC, Rolls' current owner, is unlikely to be tempted by a bigger Volkswagen bid before BMW's $568 million offer is finalized over the next few weeks. Pischetsrieder holds the master card--the implicit threat to cut off supplies of BMW engines to Rolls.

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