An intriguing new report out of Germany suggests that fierce rivals BMW and Mercedes-Benz are considering jointly developing the next generations of their small cars as they ponder some sort of alliance.

According to insiders (from both brands) quoted by German business newspaper Handelsblatt, the sharing of compact architectures could cut costs “by billions” for both German firms.

Handelsblatt says Daimler (which runs the Mercedes-Benz brand) and the BMW Group are “examining the possibility” of “extensive alliances”. Of course, late in 2018, the two Bavarian automakers announced plans to create a “joint mobility company” set to focus on on-demand mobility, car sharing, ride-hailing, parking and vehicle charging.

The new report speculates the next-generation version of the A-Class could find itself on the same platform as a future 1 Series at some point after 2025 (of course, Benz’s latest small hatch was revealed as recently as 2018, while the next-generation version of BMW’s most compact model is likely to be revealed in 2019).

Interestingly, the report furthermore suggested the automakers were talking about joint procurement of certain components, such as transmissions and battery cells.

Competitors teaming up is nothing new, of course. Earlier in January, for instance, Ford and Volkswagen announced the first “formal agreements in a broad alliance” that will include the Blue Oval brand developing and building bakkies for both companies.