Infiniti, Mercedes start joint engine output in Tenn.

The plant will produce turbocharged 2-liter four-cylinder engines for the Infiniti Q50 sedan.
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DECHERD, Tenn. -- Infiniti began building its first engines outside of Japan here today in a new factory that represents the deepening ties between Nissan Motor Corp. and Daimler AG.

The plant, separated from the large-volume Nissan powertrain factory next door, will produce turbocharged 2-liter four-cylinder engines for the Infiniti Q50 sedan as well as the C-class sedan that Mercedes-Benz recently launched in Vance, Ala.

The $319 million engine plant represents a complex 50-50 venture between Renault-Nissan and Daimler that weaves together elements from around the world.

The venture was jointly financed by Nissan and Daimler to be a freestanding Infiniti plant. It produces a Daimler-designed engine out of engine blocks, heads and crankshafts imported from Germany.

The engines are assembled on a Nissan-designed production line that incorporates Daimler engineering processes. They are then exported to Japan where they are installed at a Nissan assembly plant in the Infiniti Q50 that is then exported to Europe.

The Decherd investment will allow Infiniti to produce up to 250,000 engines a year in six variations -- three for Mercedes and three for Infiniti. Details of future engine variations have not been disclosed.

Johan de Nysschen, Infiniti Motor Co. president, said here today that Mercedes will receive the larger share of Decherd engines at first, simply because Mercedes C-class sales are higher than the Q50 volume. But he said the allocation of engines eventually will even out.

De Nysschen said the engine will also be supplied to the Infiniti Q50 that will be sold in China. A Q50 equipped with the 2-liter Decherd engine will reach the U.S. market in model year 2016, de Nysschen said.

He declined to comment on a planned announcement to be made Friday by Nissan CEO Carlos Ghosn and Daimler Chairman Dieter Zetsche to further the partnership between the two automakers.

Reuters, citing sources familiar with the plans, reported today that Daimler and Nissan have finalized a joint venture deal to build future Mercedes and Infiniti compact cars in Mexico, and will unveil details on Friday.

De Nysschen also declined to say whether that scheduled announcement would affect engine production at the newly opened plant.

You can reach Lindsay Chappell at lchappell@crain.com.


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