Daimler is open to supplying Volvo with engines and could even take a small stake in the Swedish carmaker, Manager Magazin said, raising the possibility of increased cooperation between Mercedes-Benz and China's Geely.
Daimler could buy "a couple of percent" in Volvo Cars, the German business magazine reported on Thursday, without citing sources.
Volvo declined to comment, and a Daimler spokesman said: "This is pure speculation, which we will not comment on."
The chairman of Volvo owner Geely, Li Shufu, stealthily built a $9 billion stake in Daimler by the end of February, seeking to forge an alliance with the German carmaker as a way to counter the threat from new competitors such as Tesla, Google and Uber.
Daimler Chief Executive Dieter Zetsche has welcomed the Geely chairman as a new shareholder and said any industrial alliance will depend on whether Daimler's current China partner BAIC agrees.
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