A French news agency reported that Ford, the world's second largest automaker, was set to announce this week that it will buy BMW and Japan's Honda Motor Co. Ltd, both fiercely independent companies.

Other rumoured deals have involved DaimlerChrysler purchasing struggling no 2 Japanese automaker Nissan Motor Co. Ltd and Ford or Italy's Fiat SpA buying Swedish automaker AB Volvo. The rumours drove up stock prices of BMW and Volvo.

Ford chief executive officer Jac Nasser said at the North American international auto show here that the rumours were without merit. Ford is often regarded as a potential acquirer because of its $22.9 billion in cash.

"If any consolidating happens over the next several years, we would see it as an opportunity, not a necessity," he said.

BMW board member and marketing chiefWolfgang Reitzle and Honda spokesman Andy Boyd were both dismissive.

The Quandt family controls 49 per cent of BMW's stock and has no reason to look for another partner, BMW officials said.

Meantime, president of Nissan's US operations Minoru Nakamura declined to comment on stories about a merger with DaimlerChrysler. The two have said that they are in discussions about a deal involving the Nissan diesel truck operations.

"It's an important thing to be on our own," Nakamura said, while company officials in Japan reiterated the company is not in merger talks with anyone.

DaimlerChrysler co-chairman Robert Eaton emphasised talks, which began with Daimler-Benz 14 months ago, have not moved beyond Nissan diesel. However, based on what he has heard, Eaton said there was a high likelihood two European manufacturers would announce a merger in the next 90 days.

DaimlerChrysler president Thomas Stallkamp pointed out merger talks between Daimler and Chrysler began at last year's auto show and that may be whyspeculation is heavy now.

However, many industry executives, including Mazda Motor Corp.'s North American chief Richard Beattie, believe the industry will see a significant deal by the end of the first quarter.

Nasser previously said Ford believes the number of global auto industry players will eventually shrink to six.

He predicted an automaker would need annual volume of five million units to be a long-term survivor.