(Adds details in 4th paragraph on future Infiniti and Mercedes
By Edward Taylor and Laurence Frost
FRANKFURT/PARIS, June 27 Daimler AG
and Nissan Motor Co are jointly investing $1.36 billion
to develop premium small cars and build a factory in Mexico, the
companies said on Friday, in a step that deepens cooperation
between the Mercedes-Benz and Infiniti brands.
The companies said they will build a plant with an annual
production capacity of 300,000 vehicles in Aguascalientes in
central Mexico, where Nissan already has a $2 billion
The first Infiniti cars will roll out of the new plant in
2017, followed a year later by Mercedes, the companies said,
with both brands planning to market those vehicles globally.
The companies did not specify which vehicles would be built
in Mexico. But sources told Reuters Infiniti will build three
models at the plant including a sedan, a coupe and a compact
crossover likely to replace the slightly larger QX50 model.
Mercedes-Benz plans to produce at least three corresponding
vehicles, including a crossover from new joint vehicle
architecture, developed from Daimler's MFA front-wheel-drive
In March, sources said Daimler and Nissan planned to pool
development of premium compact cars to cut costs, expand the
German carmaker's North American production footprint and
broaden the Infiniti lineup.
The 50:50 joint venture in Mexico allows Nissan, which is
allied with French automaker Renault, to share
components and technology that are already used by
Mercedes-Benz. In return, Daimler gets a first North American
production site for small vehicles, to supplement its U.S.
assembly plant in Vance, Alabama.
The German carmaker has struggled in the past with
insufficient demand for its smaller cars, while Nissan's
Infiniti brand has yet to establish itself as a significant
player in the global premium sector.
Building cars in Mexico allows Mercedes and Hong Kong-based
Infiniti to sell cars in the United States while avoiding some
of the currency and tariff costs that crimp profits on vehicles
imported from overseas. Mexico also offers lower labor rates
than Germany, Japan and the United States.
Carlos Ghosn, chief executive of Renault-Nissan, said that
"joint development of compact premium vehicles and joint
production in Aguascalientes together represent one of the
largest projects" between the Renault-Nissan alliance and
Asked if Infiniti cars eventually could be built at Mercedes
factories in Europe, Ghosn said "there is no need."
Daimler Chief Executive Dieter Zetsche was asked whether he
would consider a full-blown merger between the companies and
said, "The cooperation is so successful because it is not the
result of a merger."
The companies will add almost 5,700 jobs by the time the
plant reaches full capacity, expected in 2021, as well as 10,000
jobs at parts suppliers and related enterprises.
Mercedes, Nissan and Renault have shared engines, plants and
vehicle underpinnings for small cars since Zetsche and Ghosn
forged an alliance in 2010 cemented by token reciprocal
On Wednesday, Infiniti and Daimler began production of
four-cylinder engines at a Nissan plant in Tennessee, for use in
the Mercedes-Benz C-class and the Infiniti Q50.
(Reporting by Edward Taylor; Additional reporting by Ilona
Wissenbach in Frankfurt and Dave Graham and Gabriel Stargardter
in Mexico City; Editing by Steve Orlofsky and Tom Brown)