FRANKFURT (Reuters) - Daimler is open to supplying Volvo with engines and could even take a small stake in the Swedish carmaker, Manager Magazin said, raising the possibility of increased cooperation between Mercedes-Benz and China's Geely [GEELY.UL].

Daimler could buy "a couple of percent" in Volvo Cars, Manager Magazin said on Thursday, without citing sources.

Volvo declined to comment and a Daimler spokesman said: "This is pure speculation which we will not comment on."

The chairman of Volvo owner Geely, Li Shufu, stealthily built a $9 billion stake in Daimler by the end of February, seeking to forge an alliance with the German carmaker as a way to counter the threat from new competitors such as Tesla, Google (>> Alphabet) and Uber.[nL8N1QD5P5

Daimler Chief Executive Dieter Zetsche has welcomed the Geely chairman as a new shareholder and said any industrial alliance will depend on whether current China partner BAIC agrees.

(Reporting by Edward Taylor; Additional reporting by Johannes Hellstrom; Editing by David Goodman)