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Mercedes Near Decision on Sharing Mexican Plant with Nissan

“Potential pros and cons,” says Zetsche.

by on Sep.28, 2012

Zetsche is apparently leaning towards sharing a Mexican assembly plant with Nissan.

Daimler AG will “probably” announce by year-end a decision on where it will build a new North American assembly plant, Chairman Dieter Zetsche tells TheDetroitBureau.com, and there is a strong possibility that the new factory will be part of a planned mega-complex alliance partner Nissan has already committed to in Mexico.

“We are investigating the potential of our plants operating together,” said Zetsche, confirming a story first reported by TheDetroitBureau.com earlier this year.

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Daimler needs more capacity to supply North America and other markets , having reached the limits of what it thinks can be done out of its existing Mercedes-Benz assembly plant near Tuscaloosa, Alabama. Until now, Zetsche had only confirmed that it was looking at various sites in the U.S., Canada and the U.S.

But sources alerted TheDetroitBureau.com to discussions between Daimler and Nissan as part of a three-way alliance that also includes French-based Renault.  The partners have steadily expanded a 30-month-old alliance that will now see them develop compact engines and share transmissions. Nissan previously agreed to produce small powertrains at a plant in Tennessee that will be used on the Mercedes line in Alabama.

(For more on the latest expansion in the Daimler/Renault/Nissan alliance, Click Here.)

The partners have operated under a principle that “Nothing is off limits,” other than a full merger, explained Zetsche, during a Friday discussion with TheDetroitBureau.com. And one possibility that has been raised would be to let Mercedes find a spot at the new Aguascalientes, Mexico factory complex Nissan is now putting in place.  That factory was already expected to produce some vehicles for the Infiniti brand that would use a compact luxury platform developed by Mercedes.

Zetsche cautioned there are both “potential pros and cons” to such a plan, but Daimler insiders say the benefits are likely to outweigh any drawbacks. For his part, Ghosn told TheDetroitBureau.com that a manufacturing alliance would allow the partners to “share fixed costs on the plant,” and tap into the same supplier and distribution networks, among other things.

But the Renault/Nissan chief quickly cautioned that “this is his (Zetsche’s) decision.”

The German exec, meanwhile, said he expects a decision “will probably come to conclusion this year.  It is not yet locked into stone.”

 

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