Daimler and Nissan hit the gas

Partners to build luxury vehicles, engines, parts

Infiniti boss Johan de Nysschen, left, and Infiniti Americas chief Michael Bartsch, second from left, tour the Decherd, Tenn., plant that makes engines for Nissan and Daimler.

NASHVILLE — Daimler and Renault-Nissan’s global product-sharing partnership got a lot bigger last week. And the partners’ new plans will ripple through multiple markets and manufacturing plants.

The companies revealed two major plans Friday. The first is a project to spend $1.36 billion to construct a 50-50 joint-venture plant in Aguascalientes, Mexico, that will yield 300,000 vehicles a year of a co-developed family of compact luxury vehicles.

The second — although few details were revealed — will be a project to develop and manufacture engines and other key vehicle modules in various locations for the new compact vehicles.

At the same time, Renault-Nissan CEO Carlos Ghosn revealed that the Mexican factory project will be just one of an undetermined number of plants that will produce the new cars.

“Aguascalientes is the first production location we are announcing,” Ghosn said, clarifying the growing scope of the Daimler partnership. “Infiniti and Mercedes will also produce jointly developed vehicles independently at separate plants on three continents.”

Ghosn and Daimler Chairman Dieter Zetsche declined to provide specifics about the vehicles that will come of the arrangement. But a source familiar with the project said it will include premium-segment sedans, coupes and cross-overs.

Infiniti retailers are to begin receiving vehicles from Aguascalientes in 2017, with Mercedes-Benz retailers scheduled to get them in 2018.

The wide-reaching announcement came less than 24 hours after Infiniti officials officially opened their dedicated engine plant in Decherd, Tenn. — another key expansion of the Daimler-Renault-Nissan technology-sharing partnership.

The plant produces a Mercedes-designed 2.0-liter turbocharged four-cylinder engine for the Infiniti Q50 and the Mercedes C-class sedan.

Infiniti President Johan de Nysschen, appearing at the Tennessee plant opening, declined to say whether the factory also will supply engines for the Infiniti and Mercedes vehicles to be built in Mexico.

But he said the Mercedes four-cylinder engine will go into other Infiniti models — including vehicles that have not yet been publicly revealed.

“There will be many Infiniti models that use this engine, not just the Q50,” de Nysschen said.

“It’s pretty logical that we may also want to introduce this engine to the Q70 lineup. We may want to introduce it to some of the crossovers that are in the planning. And it will find a happy home there.”

The shared engine plant by itself is beginning to have ripple effects in North America. Although it assembles engines from blocks and heads supplied by Daimler in Germany, and crankshafts produced in Spain, all three of those components will be turned over to North American factories next year.

Decherd executives said the crankshafts will be supplied by the Toyota-affiliated crankshaft producer Aichi Forge USA in Georgetown, Ky.

Zetsche, explaining Daimler’s interest in investing in Mexico, said that “demand for compacts will continue to climb in North America.”

He said that partnering with Nissan allows Mercedes to move faster into the market.

Renault-Nissan and Daimler began working together on vehicles and technologies in 2010, and the relationship continues to expand. This year, Daimler will launch production of jointly developed new-generation Smart two- and four-seat vehicles, with Renault receiving its own version of the platform as the Twingo.

Ghosn says the partnership continues to deepen.

“Today we have 10 projects and we are working on many more than that,” he said.

“We share a common mind-set that everything’s on the table. We have encouraged our teams to look at every idea and proposal to see how they can make it work to benefit both companies.”

You can reach Lindsay Chappell at lchappell@crain.com

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