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Daimler, Renault-Nissan create partnership for small cars, powertrains

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Daimler, Renault-Nissan create partnership for small cars, powertrains

Hans Greimel

Automotive News -- April 7, 2010 - 3:16 am ET

UPDATED: 4/7/10 6:32 a.m. ET

TOKYO -- Daimler AG, Renault SA and Nissan Motor Co. agreed to a global share-swapping alliance that will have the German automaker and its French-Japanese partner cooperating on the development of small cars, commercial vehicles and future powertrains.

Under the agreement, Daimler plans to take a 3.1 percent stake each in Nissan and Renault, while Nissan and Renault will each take a 1.55 percent share of Daimler.

The move is part of a push by Renault-Nissan CEO Carlos Ghosn to broaden cooperation with other automakers, drive down costs and share the burden of developing new technologies to meet stricter emissions regulations. The three-way partnership follows similar tie-ups between Fiat SpA and Chrysler Group and between Volkswagen AG and Suzuki Motor Corp.

Renault and Nissan have an alliance dating to 1999. Today, the French automaker holds a 44.3 percent stake in its Japanese partner, while Nissan has a 15 percent stake in Renault.“In the area of new technologies, demands from regulators and consumers are intense and unrelenting,” Ghosn said at a news conference in Brussels. “We have to continue to develop a wide range of new technologies to stay relevant and competitive, and the investments required on the front end are significant.”


Daimler CEO Dieter Zetsche said his company could tap new synergies through the deal.

“Our skills complement each other very well,” he said in a statement.

“Right away, we are strengthening our competitiveness in the small and compact car segment and are reducing our CO2 footprint -- both on a long-term basis.”

Ghosn said the Daimler tie-up will generate 2 billion euros in cost reductions and new revenue for the Renault-Nissan alliance over the next five years.

Zetsche said Daimler would reap similar synergies. Speaking at the press conference, he dismissed suggestions the deal might turn sour, like the merger of Daimler and Chrysler. He said the Chrysler deal failed because it failed to pinpoint shared projects.

He called the 3.1 percent cross-holdings in this case merely “symbolic.”

“When we came together with Chrysler, we were in agreement about the merger, but we hadn't thought much about the content of collaboration,” Zetsche said. “Here it's very different. We have worked together on very specific projects for a number of months now.”

Among the new projects is a focus on developing small cars, including the next generation Smart ForTwo and the Renault Twingo, the companies said. Those models will be launched in 2013 onward and be offered with all-electric drivetrains from their debut.

Engine Swaps

It will also target sharing and co-development of 3-cylinder and 4-cylinder diesel and gasoline engines from the Renault-Nissan side to be used in those vehicles.

Meanwhile, Nissan's luxury Infiniti brand will get 4-cylinder and 6-cylinder gasoline and diesel engines from Daimler, maker of Mercedes-Benz vehicles. Ghosn said this will strengthen the Infiniti line up in the United States, China and emerging markets.

“This cooperation is going to allow Infiniti to grow faster,” he said.

The companies will also collaborate on light commercial vehicles, they said. Renault will provide a new commercial van that will be the base for a new Mercedes-Benz van planned for 2012. Daimler will also purchase diesel engines from Renault-Nissan.

Ghosn and Zetsche said neither company planned to increase the shareholdings beyond the 3.1 percent stakes. Ghosn called the share swap a motivational tool.

“The cross shareholding is a lever to give a signal inside the company to cooperate,” Ghosn said. “It's not short term; it's going to be long term. Please open up the books and exchange your know-how.”

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