Infiniti could share Mercedes small-car platform

AP News
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Posted: Sep 14, 2011 10:42 AM
Infiniti could share Mercedes small-car platform

The CEOs of Daimler and Renault-Nissan say their 18-month old partnership has avoided mistakes that sank earlier industry tie-ups and could be expanded, including using Daimler vehicle architecture in a compact car from Nissan luxury brand Infiniti.

Renault-Nissan's Carlos Ghosn, sitting next to Daimler CEO Dieter Zetsche at a news conference at the Frankfurt auto show, said tentative plans are to have Infiniti come out with a small car based on a platform from Daimler's Mercedes-Benz brand in 2014.

The front-drive platform underpins Daimler's new Mercedes B-Class hatchback and will provide the basis for four other upcoming Daimler models, including its new A-Class and a small SUV.

Zetsche and Ghosn said their cooperation on engines and vehicle platforms helps avoid overlapping investment and reduce costs, while avoiding the overstretch of earlier auto industry mergers that foundered.

Zetsche did not use the word "Chrysler" but the reference was obvious to Daimler's ultimately unsuccessful 1998 merger with the U.S. company, aimed at forming a global auto giant. The two split up and Chrysler is now controlled by Fiat SpA.

The Daimler AG and Renault-Nissan partnership works, Ghosn and Zetsche said, because it is based on specific projects that benefit both sides. Under the deal struck in April 2010, Renault-Nissan will supply small engines for use in Mercedes vehicles, while Mercedes will provide larger engines for Infiniti cars. The idea is to fully exploit each side's production capacity with higher volumes, a practice that cuts costs.

Cooperation between the two carmakers makes sense in part because consumers tend not to choose between a Mercedes luxury car and an Infiniti _ as they might between Mercedes and another luxury brand.

"I don't view Daimler as a competitor ... the cross-shopping between Mercedes and Infiniti is peanuts," Ghosn said.

He said the two companies were able to talk freely and propose more things to do together.

"There is no off-limits project," he said. "I will never say, don't come and talk to me about this or that."

The two companies also share a common platform for their Renault Twingo and Daimler Smart models that will come to market beginning in 2014. The two companies own 3.1 percent of each other's shares.

Zetsche said starting with specific, limited cooperation worked better than deciding on a visionary merger and then figuring out where the synergies would be. "We have not set up a top down, long-term framework and then said, try to fill it."

He conceded what the company did previously was at times "the opposite of what we are doing here ... the outcome was not perfect."

He said he and Ghosn were not "visionaries who live somewhere else, on Cloud 7 or Cloud 11 or elsewhere, but two pragmatic guys."