The outline deal, which reinforces Daimler's relationship with the
Renault-Nissan alliance, will see Nissan build the next-generation
Mercedes GLA sport utility vehicle and related models in Mexico
alongside all-new cars for its own Infiniti brand, said the sources,
who asked not to be identified.
The plans are due to be presented to the Daimler board for approval
as soon as April, the sources said, with the first jointly
manufactured vehicles expected in late 2017.
Daimler and Nissan have said they are looking to increase
cooperation in smaller premium cars, but neither carmaker would
confirm the Mexico production plan on Tuesday.
The companies have yet to reach a "joint formal decision", Infiniti
CEO Johan de Nysschen said in an interview at the Geneva auto show.
"But Mexico does have a lot going for it," he added, including
tariff-free exports to the U.S. and Europe.
Mercedes, Nissan and alliance partner Renault <RENA.PA> have shared
engines, plants and vehicle architectures for small cars and vans
since Daimler CEO Dieter Zetsche and Renault-Nissan boss Carlos
Ghosn announced a broad-based partnership in 2010, underpinned by
token reciprocal shareholdings.
The latest agreement will help Infiniti to fill a big gap at the
bottom end of its model range with a new SUV, sedan and coupe built
with the same parts and architecture as successors to the Mercedes
A- and B-Class, GLA and CLA, the sources said.
In return, Daimler gets a first North American production site for
its front-wheel drive "MFA" architecture, development savings and
economies of scale — in a vehicle category where it has struggled in
the past with low profitability.
Such a deal could make good sense for both partners, said Ronald
Harbour, an automotive consultant with Oliver Wyman. "For Mercedes
it would allow them to get into that market without having to invest
[to top of second column]
The new Mercedes and Infiniti models will be built at Nissan's
Aguacalientes 2 plant northeast of Guadalajara, opened in November
with an initial production capacity of 175,000 vehicles, the sources
The initiative will cut the cost by about a quarter compared with
going it alone, two of the sources said. In a sign of deepening
cooperation, the new investments will be split evenly — despite the
higher production volumes expected for Mercedes.
"Some people argue that we should (negotiate) with Daimler because
they will sell more cars on the platform," one Renault-Nissan
executive said. "But that's what gets in the way of successful
To build the new models in China, their most important growth
market, both carmakers would have to establish separate assembly
lines with their joint venture partners Dongfeng <0489.HK> and
Beijing Auto <BEJINS.UL> according to the same sources.
"It's a bit more complex in China," one said. "But you still get all
the savings from sharing parts and supply networks."
(Editing by William Hardy)
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