DaimlerChrysler eyes Honda

DaimlerChrysler's co-chairman might be eyeing a purchase of Japanese car maker Honda to help the company expand into the small-car segment, a German business weekly reports.

Juergen Schrempp (pictured) would prefer buying Honda over Italy's Fiat or French car maker Peugeot, Wirtschafts-Woche reported. Honda is particularly attractive because of its profitability and strong presence in the Asian and North American markets.

Fiat and Peugeot have been cited as possible partners in the auto industry, but some observers have also speculated that DaimlerChrysler is targeting Honda for acquisition.

A DaimlerChrysler spokeswoman said the report was pure speculation.

The magazine said the motorcycle engines made by Honda could even be used in the diminutive Smart cars produced by a DaimlerChrysler subsidiary.

More concrete discussions with Honda could begin early next year, the magazine said.

The German-US car maker is trying to boost its presence in the small car market, especially lucrative in Europe where gas prices are far higher than the United States. - Associated Press