Renault-Nissan, Daimler alliance seen as model for industry's future

• Source: Global Times
• [08:07 April 08 2010]
• Comments

Chairman and CEO of the Renault-Nissan Alliance Carlos Ghosn (L) and Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, Dieter Zetsche attend a news press in Brussels, capital of Belgium, April 7, 2010. Photo: Xinhua

The link-up between Renault- Nissan and Daimler annouced Wednesday shows the urgent need for scale in an industry still reeling from a collapse in demand and gearing up for massive investment in green-car technology.

Under intense pressure to shave costs, carmakers just outside the top global sales ranks are certain to face calls to develop alliances or to explain to their shareholders why they are betting on going it alone.

France's Renault, Japan's Nissan and Germany's Daimler Wednesday launched a new partnership aimed at saving billions of euros and accelerating sales of pollution-light electric cars.

The companies, which anticipate combined savings of four billion euros ($5.34 billion) over the first five years of their cooperation, will share existing die-sel and gasoline engines while jointly developing technology for new electrical versions.

They plan to produce and market new cars and vans in a bid to close the gap on the world's best-selling carmakers, a similar alliance finalized last year between Volkswagen and Suzuki, and Toyota.

Just three years ago, Daimler moved to unwind one of the least successful deals in the history of the auto industry, dumping its Chrysler unit for a $30 billion loss.

Now, the Mercedes-maker has decided a more limited deal with the Renault-Nissan alli-ance headed by Carlos Ghosn will give it the small-car technology and scope it needs in the face of tighter emissions and fuel economy standards.

In return, Renault-Nissan will get access to Daimler's engines for Nissan's luxury Infiniti brand and the opportunity to share vehicle platforms and bring down costs at a time when its own alliance has been seen as sputtering.

David Cole, director of the Center of Automotive Research in Ann Arbor, Michigan, said the deal could be a blueprint for future collaboration in a high-cost area: developing the engine, transmission and now battery-drive systems that power vehicles.

"We are going to see some significant mergers, acquisitions, restructuring and spin-offs (by the likes of the alliances)," Cole said.

Agencies