Given today's economic climate, most companies are thinking about downsizing (some more than others). BMW and Mercedes-Benz aren't immune to that pressure--though they're thinking less about staff and more about powertrains.
Here in the U.S., BMW and Mercedes engines are pretty robust things that start with six cylinders and move rapidly up the scale. We're guessing that's because they know how manly Americans are--even our women--and how we crave engines that demonstrate our awesome power.
However, the feds (and a few states) are ramping up requirements for fuel economy and emissions, which has the Germans rethinking things. The trick, of course, is how to offer the power customers want and the green specs that the government demands.
For its part, Mercedes is looking at diesel options--an iffy thing in the U.S. marketplace. At the top of the list: a 2.2-liter four-cylinder that hits 40mpgs. BMW is sticking with a good ol' fashioned gas-fueled four-cylinder, but throwing in some twin-turbocharging and direct-injection, just to keep up the pep. However, neither company is committed to production plans yet, wisely choosing to see how all the legal stuff pans out. We can't wait, either.