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Nissan to produce Mercedes-Benz 4-cylinder gasoline engines in North America; latest step in collaboration

In the latest advance in the collaboration of Daimler and the Renault-Nissan Alliance (earlier post), Nissan’s Decherd, Tenn., powertrain assembly plant will build Mercedes-Benz 4-cylinder gasoline engines for Infiniti and Mercedes-Benz models. Production will begin in 2014, with installed capacity of 250,000 units per year once full ramp–up is achieved.

The collaboration marks the first production of Mercedes-Benz engines in the North America Free Trade region. The Tennessee plant’s strategic location and logistics links ensure a direct supply of engines starting in 2014 for the Mercedes-Benz C-Class, built at Daimler’s vehicle plant in Tuscaloosa, Ala.

This is the newest milestone in our pragmatic collaboration and our most significant project outside of Europe so far. Localized capacity reduces exposure to foreign exchange rates while rapidly enabling a good business development in North America—a win-win for the Alliance and Daimler.

—Renault-Nissan CEO Carlos Ghosn

In the context of our Mercedes-Benz 2020 growth strategy, we have decided that we will expand the production capacities required for this close to the customers. Through the strategic extension of our cooperation with Renault-Nissan we can realize near-market engine production in the NAFTA region on attractive economic terms and make optimum use of synergies arising from the cooperation. Thus we are systematically broadening our manufacturing footprint in this important growth market.

—Dr. Dieter Zetsche, Chairman of the Daimler Board of Management and Head of Mercedes-Benz Cars

Nissan began powertrain assembly in Decherd in 1997. Today it manufactures 4-, 6- and 8-cylinder engines for the complete lineup of US-produced Nissan and Infiniti vehicles. The plant also houses crankshaft forging and cylinder block casting operations. In 2011, Decherd produced more than 580,000 engines on a covered area of more than 1.2 million square feet (111,000 square meters).

Daimler and the Renault-Nissan Alliance launched their strategic collaboration in April 2010, including an equity exchange that gives the Renault-Nissan Alliance a 3.1% stake in Daimler and Daimler a combined 3.1% interest in Renault and Nissan. The collaboration began with three project pillars:

  • Joint smart/Twingo architecture. The project is on track for launch in the early first quarter of 2014. Two-seater smart vehicles will be produced at Daimler’s plant in Hambach, France, and four-seater smart and Renault production are slated for Renault’s plant in Novo Mesto, Slovenia.

  • All-new entry-level city van project for Mercedes-Benz. The project is on schedule with expected launch in late 2012.

  • Powertrain cross-supply. The Alliance is supplying Daimler with compact three-cylinder gasoline engines to be used in smart and Twingo vehicles and four-cylinder diesel engines to be used in the jointly developed light commercial vehicle and in Mercedes-Benz’s next generation of premium compact cars. Daimler will supply Nissan and Infiniti with four- and six-cylinder gasoline and diesel engines from the current and future engine portfolio as well as with automatic transmissions.

Since its founding in April 2010, the collaboration has been gradually expanded. In addition to the announcement this week about North American engine production, the companies had decided earlier to partner on:

  • Platform sharing. Infiniti plans to base a premium compact vehicle on the Mercedes compact-car architecture, starting in 2014.

  • Electric vehicles. Daimler will provide batteries from its production facility in Kamenz, Germany, and Renault-Nissan will provide electric motors for the use in electric vehicles (smart and Twingo ZE). First releases will occur in 2014.

Comments

HarveyD

Sub-assemblies sharing between 2 or more large car manufacturers is a smart way to reduce cost via increased mass production. This will also be advantageous for future e-vehicles. Will it be more efficient than current 3rd party suppliers?

Similar arrangement between (all?) Japanese car manufacturers could reduce their R & D and manufacturing cost and make them more competitive.

Lad

MB is a very good engineering company; but, In general, I believe their parts are not as well made as Japanese parts; so the German cars require more maintenance. Now, MB has a source for better parts.

HarveyD

Lad....from recent experience I have to agree with you. I had 100+ times more problems with a MB320 than a Nissan Maxima.

Reel$$

A big win for US automakers. More manufacturing at home the better for N/A economies.

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