Mercedes is considering outsourcing production of transmissions for its next-gen A, B and C-class models, which could also lead to the closure of its current transmission plant in Zuffenhausen, Germany. The decision is said to be backed by CEO Dieter Zetsche, who considers the development of new transmissions as non-core to Mercedes. By outsourcing the development and manufacturing process to an outside supplier, engineers could potentially reduce costs and improvement innovation, a Mercedes insider revealed to Auto Motor und Sport.

According to the source, Mercedes is also seeking a supplier for a new eight-speed dual-clutch gearbox, giving it an edge over both Lexus and BMW who both plan to rely on fully-automatic eight-speed transmissions. A dual-clutch gearbox is better in both fuel-consumption and straight-line speed when compared with conventional autos. Mercedes is hoping that either Getrag or ZF develops and manufactures the new gearbox as designing the box itself would be too costly for the carmaker.