Daimler, Renault-Nissan Partnership Proving Promising

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Frankfurt Auto Show

FRANKFURT – The partnership between Daimler and the Renault-Nissan Alliance is progressing better than anticipated, say the CEOs from the two auto makers.

Inked in Brussels in May 2010, the relationship is centered on three pillars – joint development and/or technology sharing for small cars, engines and light-commercial vehicles.

The idea was to lower costs through technology-sharing and drawing upon each auto maker’s area of expertise.

Neither company had “desperate needs,” says Daimler CEO Dieter Zetsche, but each saw areas of opportunity.

In a joint conference at the Frankfurt auto show, Zetsche and Renault-Nissan CEO Carlos Ghosn review specific projects and stress there are no areas of cooperation that are not under discussion.

The development of small-car architectures and engines is on schedule, the executives say, with the first prototypes to begin testing this month. Early production is planned for next year, and an on-sale date has been set for early 2014.

The architectures and engines, details of which are not yet disclosed, will be used on the next-generation Smart car and Renault Twingo. Both executives say two cars will carry attributes of their respective brands.

A new generation of Mercedes compact cars also is planned, but won’t begin until after the Smart and Twingo are launched in 2014, Zetsche says.

Zetsche: Each company saw areas of opportunity.

A next-generation Mercedes A-Class will be the recipient of a new 4-cyl. engine, he adds, but the mill won’t be limited to that model.

Joint development of city vans also is under way, with Mercedes-badged units to be produced at a Renault plant in France.

Although the city-van project is in its early phases, Ghosn says Renault’s manufacturing techniques passed all of Mercedes’ quality metrics.

As for Renault, it will get Mercedes’ V-6 and I-4 engines beginning in 2013. The V-6 mills are expected to power Infiniti models.

Mercedes will source small-displacement engines for its B-Class E-Cell extended-range electric vehicle. “We needed a (small) combustion engine and Renault’s was perfect,” Zetsche says. “It’s fun to see how things are developing.”

The B-class architecture will be used for five future Mercedes, he says, suggesting it also may be shared with Renault-Nissan.

Although the Daimler executive does not mention Chrysler by name, he hints that past partnership experiences have taught the auto maker what not to do.

“What we did formerly is the exact opposite of what we’re doing now,” he says. “Before, we sat down and went over specific things we could do together, and the results were not great.”

In the partnership with Renault-Nissan everything is discussed and then decided by both parties. Projects that don’t benefit both auto makers are scrapped, not forced, he says.

Ghosn agrees this partnership is different, citing Renault’s failed affiliation with Swedish auto maker Volvo.

“We’ve all read headlines of how treacherous alliances are,” he says. “But this is built on respect and a long-term commitment to getting results and expanding possibilities.”

Combined, Daimler and the Renault-Nissan Alliance have the largest research and development budgets in the industry, giving them a clear advantage, Ghosn says. However, they have to “avoid overlapping investments and technology.”

Ghosn admits some Mercedes components are price-prohibitive for mainstream Renault and Nissan products, but says higher volumes could drive costs down.

Ghosn also says a new Infiniti small car is planned. Neither timing nor what technologies will be shared is not disclosed, but Ghosn says there is “no way” production will take place in Japan due to the high value of the yen.

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