Renault-Nissan steers toward closer partnership with Daimler

RenaultNissan hopes to reach an agreement with German partner Daimler to deepen the alliance between the carmakers during the first quarter of next year.

The agreement would allow Daimler to build Mercedes-Benz cars in Renault-Nissan’s factory in Mexico, increase the use of Renault engines in luxury Mercedes models and strengthen co-operation on future models for Nissan’s premium Infiniti brand.

People with knowledge of the discussions said the two parties agreed on the benefits of a closer relationship, but that no details or exact timelines had been officially finalised.

“It will take some months to become public,” said one of the people. Daimler did not respond to a request for comment and Renault-Nissan declined to comment.

Any agreement would come as all global carmakers explore partnerships and joint ventures to reduce costs and grow in new markets. The moves are designed to cope with the worst European car market in two decades and unprecedented pressure to innovate into new areas, such as more fuel-efficient cars.

Renault and Nissan, which have operated in a global alliance since 1999 that has seen both benefit from billions of euros worth of cost savings and production sharing, agreed in 2010 to begin co-operation with Daimler on defined projects.

The three companies collaborate on the joint production of some engines and the shared supply of trucks, while Renault’s Twingo and Mercedes’ Smart car were developed from the same platform.

The continued success of those projects has been helped by the close personal relationship between Carlos Ghosn, chief executive of the French and Japanese carmakers, and Dieter Zetsche, chairman of Daimler.

This has convinced many executives at all three companies that expanding their partnership would bring mutual benefit, according to the people, who declined to be named as the talks are private.

Daimler, which already sources some engines for its smaller Mercedes models from Renault, would increase its supply from the French carmaker under the possible agreement. The German group would also use production capacity at the alliance’s factory in Aguascalientes, Mexico, which is being expanded.

Proponents of the agreement cite Daimler’s lack of expertise in smaller, less polluting engines, which is a strength of Renault. Nissan is also keen for Mercedes to assist it with developing new models for its luxury Infiniti brand.

“If you look at the footprint of Mercedes and Infiniti, there is already capacity in Europe, there is already capacity in China. There is one capacity missing,” said the person, referring to the Americas. “It is all very logical,” said a second person with knowledge of the talks.

Source: FT


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