On Friday, German rival Volkswagen won the bidding war, and the Munich based-company announced that it would carry out its threat.

Many Rolls-Royce models depend on BMW's V12 engines, and Volkswagen will have to quickly find and fit an alternative motor for its newest car platform.

Not the home of Rolls-Royce

But beyond the game of tit-for-tat, BMW will now have to think hard about its future. Will the company be able to enter the top-range, luxury limousine segment of the car market on its own, or will it be content with being the purveyor of cars to the world's upper-middle classes?

After Rolls-Royce's parent company Vickers announced the deal with Volkswagen, BMW issued only a brief statement, calling the prices offer for Rolls "not economically viable."

More importantly, BMW said it would undertake "necessary plans and development work" to enter the luxury market through other means.

Will the pulling power of this badge equal Rolls-Royce's?

This, however, comes with a price tag. BMW may believe that the Rolls-Royce brand name, the factory in Crewe, and all the experience of its workers are not worth £430m, the price Volkswagen will have to pay.

Industry analysts, however, make a different calculation. They believe that it will cost BMW perhaps as much as one billion Deutschmarks to develop a luxury limousine from scratch. Add the costs for setting up a work shop, establishing a distinct sales network and building the brand name - and Volkswagen's purchase may look like a bargain.

Nonetheless, this seems to be an option which investors could take a liking to. On the news that Vickers shareholders had rejected BMW's bid, the company's share price rose to a record high.

No one is sure how big the market for top-range limousines costing more than £120,000 ($200,000) really is. More and more companies are trying to gain a foothold. Daimler Benz, for example, already has well-developed plans for its own top-end car, called Maybach, reviving a German luxury marque which made its name in the '20s and '30s.