In a spectacular twist yesterday in the ongoing battle for Rolls Royce, VW outbid BMW by striking a deal with Vickers to buy the luxury marque for 430 million pounds ($ 713 million), outstripping BMW's earlier 340 million pound offer. BMW immediately retaliated by threatening to stop supplies of engines and components to Rolls Royce for its latest model.

Peich dismissed the threat as "the usual sabre-rattling," and suggested a compromise may be reached between VW and BMW. In return for continuing to supply the engines and parts, VW would offer BMW "otherobjects of barter," Peich said.