German car maker BMW and Italy's Fiat have signed a memorandum that could result in the use of common parts for their Mini and Alfa Romeo brands.
BMW said that the joint production and development of common components and platforms would help achieve economies of scale and reduce costs.
The results of the discussions are expected by the end of the year and further details were not disclosed.
Minis are produced at the BMW plant in Cowley, Oxford.
Fiat chief executive Sergio Marchionne said the proposed alliance is a significant cornerstone of Fiat's strategy and would improve the competitive position of both parties.
"We are delighted to work with such as esteemed and respected partner in the automotive industry," he said.
Alliances have been an important part of the turnaround of Italy's largest automaker, helping it to share costs and expand into key markets.
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