It has been rumoured that two of the largest vehicle manufacturers in the US could be considering a merger.

According to reports in the US, General Motors (GM) has drawn up potential plans to buy out rival Chrysler from its German parent, DaimlerChrysler.

Chrysler continues to make a loss and as the world automotive market continues its slowdown, GM may see the move as an opportunity to compete with the growing success of Japanese rival Toyota.

Such a deal might also open up further opportunities for the development of low-emissions technologies, as the two companies would be able to share information on their efforts so far. This could give rise to a GM alternative to the hugely successful Toyota Prius and Camry hybrids.

Suggestions have come from Automotive News, which has cited sources in both Germany and the US, that claim "high level talks" are already underway between GM and DaimlerChrysler.

GM has so far refused to comment on the speculation.

Ÿ Adfero Ltd