Dec. 10 (Bloomberg) -- Bayerische Motoren Werke AG and Daimler AG, the largest luxury-car makers, stand to benefit more from a government rescue of the U.S. automobile industry than if their competitors go bankrupt.

A proposal to grant General Motors Corp. and Chrysler LLC $15 billion in emergency funding should avert a meltdown that would depress sales and drag down the financially strapped parts makers that supply the European companies’ plants both in North America and elsewhere.

“You can’t underestimate what would happen when a large player collapses,” BMW Chief Executive Officer Norbert Reithofer said yesterday in an e-mailed response to questions. “That would impact the supplier structure and therefore the entire industry.”

The U.S. is the No. 1 market for the Munich-based company and the second-biggest for Daimler’s Mercedes-Benz. Both carmakers have factories there, and while they and other German brands control about 7 percent of the American market, they compete more with each other than with GM and Ford Motor Co.

Any sales boost resulting from the collapse of a U.S. carmaker would come “in the very long term,” said Nigel Griffiths, London-based director of research firm IHS Global Insight. “In the short term, volumes would come heavily down because of the impact of a collapse on the real economy and the American psyche.”

Vote Imminent

Congressional Democrats sent President George W. Bush a draft proposal for a bailout package on Dec. 8 that calls for a government-appointed “car czar” to oversee long-term industry restructuring as a condition for aid. A vote on the measure may come as early as today.

BMW rose 50.5 cents, or 2.3 percent, to 22.62 euros in Frankfurt. The stock has declined 47 percent this year. Daimler advanced 0.9 percent to 25.90 euros and has slid 61 percent this year. GM was down 2.8 percent at $4.57 as of 12:43 p.m. in New York amid concern the bailout may be run into Republican stalling tactics in the Senate. It has lost 82 percent in 2008.

Stuttgart, Germany-based Porsche SE, maker of the iconic 911 sports car, also counts the U.S. as its largest market, while Volkswagen AG, the biggest European carmaker, is building its second North American plant in Chattanooga, Tennessee.

Daimler of Stuttgart and Wolfsburg-based VW declined to comment on the U.S. bailout. Porsche didn’t return calls.

Continental, Bosch

Parts purchased by manufacturers account for 75 percent of the value of an average car, according to Germany’s VDA industry group. That makes Continental AG, Robert Bosch GmbH and Magna International Inc., which all make parts for both U.S. and European customers, critical for maintaining production.

Many components are unique to specific models, making it tough for carmakers to mix and match between suppliers. Anti- lock brakes for GM’s Chevrolet Suburban, for instance, wouldn’t be suitable for Volkswagen’s Golf.

“It could get enormously messy,” said IHS’s Griffiths. “Most carmakers have people looking at the security of their supply chain. Those are the people working overtime right now.”

The threat to U.S. revenue comes as car sales in Germany are forecast to drop 6.5 percent next year to the lowest since reunification in 1990, according to the VDA. The auto industry in Europe’s largest economy accounts for one in eight jobs.

“Germany wouldn’t be spared the fallout should one of the top three U.S. automakers collapse,” said Klaus Lippold, chairman of the German parliament’s transportation committee and a member of Chancellor Angela Merkel’s CDU party. “If the U.S. car industry slumps, we’re going to feel the consequences.”

Congress is considering a bailout for U.S. automakers even as their European counterparts lobby for 40 billion euros ($52 billion) in low-interest loans and incentives to scrap vehicles more than eight years old in an initiative led by the Brussels- based European Automobile Manufacturers Association.

Fiat Concern

Italy’s Fiat SpA and PSA Peugeot Citroen and Renault SA of France, which vie with the European units of GM and Ford, are among companies that say the U.S. bailout may make it tougher for them to compete. Christian Wulff, premier of the German state of Lower Saxony, where VW is based, has labeled the rescue plan “illegal” and VDA President Matthias Wissman has called for Europe to create a level playing field.

IHS’s Griffiths said Europe’s auto producers needn’t worry about missing out on aid.

“They’re going to get it,” he said. “The governments see that the carmakers are enormous parts of their economies. The big players are all national champions.”

The U.S. bailout may be justified to “avert a crisis of much greater magnitude” even if it does put Europe at a competitive disadvantage, the CDU’s Lippold said.

Shorter Hours

Daimler and Volkswagen, which have the biggest U.S. sales among European carmakers, have posted a combined profit of 25 billion euros since the end of 2004, while GM and Ford have lost $95 billion. Yet the deepening global recession has led even Europe’s leanest producers to fire workers or cut hours.

Daimler and BMW, which suffered a 25 percent plunge in November sales, have put employees on extended vacations to curb output of unwanted cars. Even VW, with a product lineup regarded as better suited to surviving the slowdown than luxury producers, has extended the Christmas break by five days.

Still, VW will emerge as a winner in the U.S., along with Toyota Motor Corp. of Japan, if it’s able to take an increased share of the regular market as GM struggles to reposition itself even with federal help, said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen.

To contact the reporter on this story: Chris Reiter in Berlin at creiter2@bloomberg.net

Last Updated: December 10, 2008 12:53 EST