FRANKFURT (Thomson Financial) - Bayerische Motoren Werke AG and DaimlerChrysler AG's Mercedes division are in talks to cooperate on making a compact car based on BMW's Mini model, Auto Bild magazine reported, without saying where it got the information.

A decision is expected at the end of this month, it said.

A spokesman for DaimlerChrysler declined to comment on the matter, but added that the company does not rule out cooperation with peers.

DaimlerChrysler yesterday denied a report saying the company plans to expand its existing hybrid engine cooperation with BMW.

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