Daimler And Renault-Nissan Set To Announce Partnership

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Daimler is set to formally announce a partnership with Renault-Nissan over an extensive deal to share everything from engines, platforms and even procurement services. According to latest reports, all brands comprised within these three companies will work much more closely together in the near future, including Mercedes-Benz, Renault, Nissan and Smart.

“We have talked to just about everyone in recent years but over time it became apparent that Renault provided the best fit both in terms of operations and business culture,” a Daimler source familiar with the talks revealed to Autocar.

Potentially saving billions of dollars for all parties concerned, the biggest aspect of the new partnership is the co-development of a new small car platform that will underpin a score of models including the next-generation Smart ForTwo, a new ForFour, and a new Renault Twingo. The platform will feature a rear engine layout and offer gasoline, diesel and all-electric drivetrains. Nissan is also expected to launch its own model based on this new platform.

A new family of four-cylinder engines will also be developed, ranging from about 1.2 to 1.8-liters in displacement. They will feature in the next-generation Mercedes-Benz A- and B-Class models as well as several Renaults and Nissans.

Finally, Nissan is also expected to borrow the latest MFA front-wheel drive platform destined for the new Mercedes-Benz A- and B-Class models for use in a new entry-level Infiniti. There’s also a chance that both Renault and Infiniti will be able to borrow V-6 and V-8 engines, as well as a new seven-speed automatic transmission, from Mercedes-Benz.

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Press Release

Daimler, Renault Form Global Car Alliance

Renault-Nissan Alliance and Daimler AG announce wide-ranging strategic cooperation

* Cooperation on the next-generation smart fortwo and Renault Twingo, including electric versions, as well as on expanding the smart and Twingo families

* Widespread powertrain sharing and co-development on future projects with applications across passenger cars and light commercial vehicles, specifically:
o The sharing and co-development of diesel and gasoline engines from the Renault-Nissan Alliance; to be used in the new smart and Renault Twingo and to be adapted and modified with Mercedes-Benz characteristics for its new generation of premium compact cars
o The sharing of gasoline and diesel engines coming from Daimler to Infiniti, the luxury division of Nissan Motor Company, and providing the opportunity for further collaboration
o The sharing of a Renault-Nissan Alliance diesel engine and transmission for the Mercedes-Benz Vito

* Collaboration in the field of light commercial vehicles

* One-time cross-shareholding amounting to 3.1% of each partner’s equity capital

* Additional synergies encompassing selective common purchasing opportunities, exchange of operational benchmarks and best practices to be shared across both groups.

BRUSSELS, Belgium --- The Renault-Nissan Alliance and Daimler AG today announced a broad strategic cooperation that will enable both groups to already realize benefits quickly from a range of concrete projects as well as sharing of best practices. The two groups also announced an equity exchange that will give the Renault-Nissan Alliance a 3.1% stake in Daimler and Daimler a 3.1% in Renault and a 3.1% stake in Nissan.

According to Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and head of Mercedes-Benz Cars, “Daimler and the Renault-Nissan Alliance are combining common interests to form a promising foundation for a successful, strategically sound cooperation that is based on a number of very concrete and attractive project cooperations. Our skills complement each other very well. 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. We know that we can make brand-typical products based on shared architectures. The individual brand identities will remain unaffected.”

Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, said: “The Renault-Nissan Alliance knows how to work successfully in collaborative partnerships, and this experience is extremely valuable in today’s and even more tomorrow’s global auto industry. This agreement will extend our strategic collaboration and create lasting value for the Renault-Nissan Alliance and Daimler as we work on broadening and strengthening our product offering, efficiently utilizing all available resources and developing the innovative technologies required in the coming decade.”

Highlights of the Cooperation

Following intensive and productive talks, specific projects have been agreed upon and will be implemented with immediate effect. Specifically:

New common architecture for small vehicles

The successor to the current smart fortwo, a new smart four-seater and the next-generation Renault Twingo will be engineered on the basis of a jointly developed architecture. All vehicles will clearly differ from each other in terms of product design. One main characteristic of the new architecture will be the unique rear wheel drive concept used by current smart vehicles.

The launches of the jointly developed models are planned for 2013 onwards. The smart plant in Hambach, France will be the production location for the two-seater versions, while the Renault plant in Novo Mesto, Slovenia will be the production location for the four-seater versions. Right from its market launch, the jointly developed future models will also be available with an electric drive.

Powertrains

The focus of the cooperation in the powertrain area is on the sharing of highly fuel-efficient, diesel and gasoline engines between the Renault-Nissan Alliance and Daimler.

The Renault-Nissan Alliance will provide 3 and 4 cylinder gasoline and diesel engines out of its portfolio to Daimler, which will then be adapted and modified to reflect Mercedes’ characteristics. The result is a win-win situation for both sides: Daimler will be able to utilize Renault-Nissan Alliance engines and capture additional sales potential for Mercedes-Benz’ future lineup of premium compact cars, while the Renault-Nissan Alliance will improve its capacity utilization.

Daimler will provide gasoline and diesel engines out of its current portfolio to Infiniti. This includes 4 and 6 cylinder gasoline and diesel engines. The result is a win-win situation for both sides: Infiniti will be able to utilize Daimler engines, while Daimler will improve its capacity utilization.

Daimler, Renault and Nissan will also cooperate on future gasoline and diesel engines. Final production decisions for newly, co-developed engines will be taken at a later time, seeking a production network that is well balanced, thus benefiting all sides.

The area of engine cooperation will be driven by a technical concept that ensures the preservation and clear distinctiveness of the individual respective brand and product identities, while at the same time providing a highly competitive cost structure. First, a high level of standardization of the non- brand-relevant components will provide substantial savings for both partners. Second, the use of separate, brand-specific technology packages will ensure
that the requirements of the respective brands are met.

A key objective is to increase competitiveness of all partners through a substantial increase in volumes, leading to economies of scale and cost sharing
in development.

Collaboration on light commercial vehicles

The companies have also agreed on a close cooperation in the light commercial vehicle segment. Mercedes-Benz Vans will expand its portfolio to offer an all new entry-level, intended for commercial usage, from 2012 onwards. The technical basis of this van will come from Renault and will be produced at the Renault plant in Maubeuge, France. Both partners will benefit from higher unit sales, better capacity utilization, shared investment burden, resulting in a better overall cost basis.

In addition to cooperating on small commercial vehicles, selected powertrain components will also be shared to enlarge mid-size van product offering and sales volumes. This includes a small diesel engine and transmissions which Daimler will procure from Renault-Nissan for its mid-size van, the Mercedes- Benz Vito. This additional entry-level motorization will generate additional unit sales for Mercedes-Benz and optimized capacity utilization at Renault.

Equity Exchanges

This strategic cooperation is underscored through a one-time cross-shareholding structure which enables the three companies to exchange, benchmark and create synergies on the basis of a long-term mutually beneficial relationship. The overall construction of the deal is based on the principle of a 3.1/3.1/3.1 percentage cross-holding between Renault, Nissan and Daimler; it will be transacted through an exchange of shares:

* Daimler will get 3.1% of Renault’s newly issued shares;
* Daimler will get from Renault 3.1% of Nissan existing shares;
* Renault will get 3.1% of Daimler shares
* Renault has independently agreed to exchange 1.55% of Daimler with Nissan for 2% of Nissan shares;
* Renault and Nissan will each hold 1.55 % of Daimler treasury shares.

The strategic cooperation will be managed by Renault-Nissan B.V. for the Alliance and Daimler through a new cooperation committee giving representation to all parties. The cooperation committee will be co-chaired by Carlos Ghosn and Dieter Zetsche and steered by senior executives of the three companies.

Further opportunities for collaboration

It is the intention of both groups to create a long-term framework to work closely on future areas of cooperation between Renault, Nissan and Daimler. Each company will pursue future opportunities following the closing of the agreement on the strategic cooperation and the implementation of the first major cooperation projects. These include opportunities to be studied on shared modules and components between Infiniti and Mercedes-Benz vehicles, regional cooperation in the United States, China and Japan between Nissan, Infiniti and Daimler. In addition, opportunities to co-develop technologies relating to electric vehicles and batteries will be explored between Renault, Nissan and Daimler.

Worldcarfans

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Renault-Nissan CEO Carlos Ghosn and Daimler AG chairman Dieter Zetsche sign the agreement

My battery is better than yours - Daimler and Renault-Nissan quarrel over superiority

Not much more than a week ago, Daimler and Renault-Nissan announced an alliance that was reported to possibly lead to more small cars from the two brands. We have visions of Twingos and Smarts sitting side-by-side with a Nissan sibling not far behind. As alliances go, there could be no greater pairing, right?

Everything was going as planned with paperwork signed and reports pouring in about the bright future for the companies until one question was discussed which probably went down something like this: What batteries should we put in the Smart ED and the Twingo ZE? Should we go with Renault-Nissan ones or the Daimler-developed units? Maybe different batteries can go in each vehicle. Nah, our batteries are better so let's go with that. What do you mean yours are better?

Stuttgart, we've got a problem! As it turns out, both Daimler and Renault-Nissan have independently vowed to become world leaders in battery technology. When you take two companies that believe they are the best in the biz and ask them to select one battery, you are really asking for one company to admit to failure, right? The battery disagreement began at the signing, with Nissan chief executive officer Carlos Ghosn and Daimler CEO Dieter Zetsche each talking a bit of smack.

Ghosn opened with, "We are obviously going to do everything in order for our battery to be considered as the best," adding that Daimler is "not obliged" to use Nissan batteries but "doubts" that they could find anything better out there. Zetsche responded that Ghosn may be right and a better battery may not exist outside of Daimler, but one could likely be found "inside" the company. He added, "We have the production know how and the financial muscle to secure a long-term competitive position."

Compromise is key to alliances, but batteries are an element that both companies hold in high regard. This early disagreement seems far from minor and it will be interesting to see how it works out.

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