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Daimler, Renault-Nissan Link on Small Car Technology and Development

Bill DiBenedetto | Friday April 9th, 2010 | 0 Comments

The partnership between Germany’s Daimler AG and the Renault-Nissan Alliance to share small car, electric vehicle and hybrid technology and development costs is a landmark deal on several levels, including the fact that they even agreed to do something like this.

Imagine Ford, Chrysler and General Motors forging a similar agreement. You really can’t can you? It would be about as unbelievable as someone throwing their shoe at the president of the United States, for example … oh wait.

Anyway, their “broad strategic cooperation” pact also underscores the urgency and pressure from an economic and regulatory perspective that carmakers are feeling – at least in a big chunk of the rest of the world – about moving quickly to fuel efficient smart, hybrid and electric vehicle production.

According to a Bloomberg report out of Stuttgart, Germany, the automakers are “crunched for cash” and under heavy pressure to meet U.S. and European Union emissions standards as quickly as possible.

In a statement Wednesday, Zieter Zetsche, Daimler’s chairman and head of Mercedes-Benz Cars said that combining common interests will “form a promising foundation for a successful, strategically sound cooperation… Our skills complement each other very well.”

Zetsche added that the alignment will immediately strengthen the companies’ competitiveness in the small and compact car segment while reducing their CO2 footprint on a long-term basis.

Under the deal, the auto makers have acquired 3.1 percent stakes in each others’ companies, and they will collaborate on the development of a commercial van for the European market, most likely based on Renault’s Kangaroo model. Their agreement includes “widespread powertrain sharing and co-development on future products with applications across passenger cars and light commercial vehicles,” including sharing and co-development of diesel and gasoline engines in the small, compact car segment for use in Renault smart cars and modified for a new generation of Mercedes-Benz premium compact cars.

In addition, engines and other components from Daimler could eventually be shared with models in Nissan’s Infiniti luxury division.

The companies also say that “opportunities to co-develop technologies relating to electric vehicles and batteries will be explored between Renault, Nissan and Daimler.”

“This agreement will extend our strategic collaboration and create lasting value for the Renault-Nissan Alliance and Daimler,” said Carlos Ghosen, chairman and CEO of the alliance. He said the collaboration will broaden and strengthen the companies’ product offerings while “efficiently utilizing all available resources and developing the innovative technologies required in the coming decade.”

“We know that we can make brand-typical products based on shared architectures,” Zetsche said. “The individual brand identities will remain unaffected.”

It’s estimated the Daimler-Renault-Nissan hookup will generate savings of 4 billion euros ($5.3 billion) over five years.

There’s a clear lesson that U.S. and the other big automakers should heed: Collaboration and technology-sharing to build cleaner and more efficient vehicles makes much more sense than driving down that road alone.


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