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Daimler and Renault-Nissan strike a global partnership

Wed, 07 Apr 2010

Daimler today struck a wide-ranging partnership with the Renault-Nissan alliance, in a deal that will usher in new jointly developed cars, shared technologies and a multitude of cost savings.
Cars such as the new 2014 Smart Fortwo will now be twinned with the next Renault Twingo, while the Forfour is set for a comeback and we can expect plenty of shared combustion engines and electric motors, borrowed platforms and jointly developed SUV tech across all three parties. And that's only scratching the surface of the possibilities opened up by this wide-ranging deal.

The new co-operation signals a return to a global expansion for Daimler, after it expensively unravelled itself from the disastrous DaimlerChrysler merger. But can it make this deal work where the alliance with Auburn Hills failed?

Chief executive officers Dieter Zetsche and Carlos Ghosn today spelled out the small print of the major co-operation, which is set to include:

• Purchasing, engineering and component sharing across the board
• Jointly developed small cars to begin with, and vans
• A swapping of 3.1% equity stakes in each other's capital
• Renault-Nissan small 3cyl and 4cyl petrol and diesels to be used in new Smart Fortwo and new small Mercs
• Merc petrol and diesel engines to power future Infiniti models
• Combined electric strategy seeking common approaches where possible
• Each brand to be tuned to suit its characteristics
• Next Fortwo and Twingo to be rear-wheel drive
• Two- and four-seater versions available from 2013 with electric options from launch
• Merc Vito van to use Renault-Nissan diesels and transmissions, new smaller Merc CV based on Renault Kangoo from 2012
• This co-operation doesn't affect existing partnerships, such as with BMW on larger car component sharing

Zetsche said: '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 numer 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... We know that we can make brand-typical products based on shared architectures. The individual brand identities will remain unaffected.'

The deal was formally announced in a jointly held press conference in Brussels' Square Meeting Centre. CAR is there and will post live updates here throughout the morning.

Top tip – the latest updates are at the top in blog format, so start from the bottom and scroll up for the full story. All times below are local Central European Time (CET)

• 12.10pm: It's a wrap
The press conference is over and a swarm of photographers descends on the two CEOs. I'm struck by the openness of Zetsche, in particular, who seems unfazed by his sour Chrysler experience. What'll make this new co-operation work is Ghosn's experience in making the Renault-Nissan alliance work, closer cultural links and a deep-seated desire to make the best of the scale presented. That never existed with Chrysler.

Both sides will continue to work with other parties – Merc is talking with BMW to collaborate on larger cars and Nissan works with at least 10 partners globally.

This alliance could expand, but the equity swap is designed to cement the relationship between Daimler and Renault-Nissan. Each party will save around €2 billion over the next five years and 'three or four contracts' are already signed on new joint projects. Expect plenty more in the coming years.

• 10.25am: Carlos Ghosn's vision
'The car industry is more and more going towards consolidation, sharing investments and best practice. I've been saying this for the past decade. When you see what you have to do with electric cars and competing in emerging markets and having a car in every sector – no small or medium car manufacturer can afford that... But you can mess up scale. Companies who have had large volumes in the past have not made it work. It's what you do with the scale and how you make it work for you.' That's Ghosn's personal vision. Sounds very like Fiat CEO Sergio Marchionne's world view.

• 10.10am: The press conference 
They're in full swing. Combined savings of €2bn for each group, in economies of scale, reduced purchasing costs and greater factory utilisation. There will be three versions of the next Smart, reveals Dr Z: a two-seater coupé and cabrio, plus a new four-seater twinned with the next Twingo. Smart Forfour, anyone? Plus each version will have an electric option from launch.

• 9.30am: Who's swallowing who? 
When Daimler famously 'merged' with Chrysler, it was soon accused of taking it over. The market capitalisation of the three new partners stood as follows yesterday: Renault was worth €10.5bn, Nissan €29.7bn and Daimler €37.7bn. Big numbers, puts in context the might of these three players in the global car industry. The press conference is due to start in quarter of an hour, time to head up to the auditorium where the deal will be formally announced.

• 8.20am: The home of Eurocrats
Time to transfer to the convention centre where the deal will be announced. It's telling they've chosen a neutral meeting ground. Only four UK journalists are attending the joint press conference today so we'll endeavour to get you the behind the scenes story first. There's an air of expectation among the assembled media pack - we all too keenly remember Daimler's aborted merger with Chrysler in the 1990s. Will Renault-Nissan prove a better cultural fit?

• 8.06am: Touchdown!
CAR arrives in Brussels on an early flight. It's all very as we only heard about the press conference at 5.00pm yesterday. We taxi past what appears to be Carlos Ghosn's Nissan-liveried corporate jet (big, would make a Big Three boss weep). Time for a cappuccino after a 3.50am start.

By Tim Pollard in Brussels