Daimler, Renault-Nissan Partnership

123jump.com Staff
07 Apr, 2010
New York City

Daimler and Renault-Nissan alliance agreed to form a partnership to develop better engines, cut production costs and develop small car technologies. Two companies will take 1.2 billion euros stake in each other.

[R]6:00 PM Frankfurt – Daimler and Renault-Nissan alliance agreed to form a partnership to develop better engines, cut production costs and develop small car technologies. Two companies will take 1.2 billion euros stake in each other.[/R]

Daimler AG and Renault-Nissan agreed to enter into an alliance to build fuel efficient engines, develop small car technologies and share parts development costs.

Renault and Nissan each will take 1.55% stake in Daimler AG totaling 1.17 billion euros and Daimler will acquire 3.1% in Renault and same percentage in Nissan. The one time swaps are not expected to be increased according to the companies.

Automakers are looking for partnerships as the cost of new product development keep rising and global sales remain weak. Tougher environmental regulations are also driving companies to find ways to trim carbon emissions.

Dieter Zetsche, Daimler AG Chief Executive and Carlos Ghosn leader of Renault and Nissan alliance will head 12-member team that will monitor partnership progress.

The agreement is expected to save 4 billion euros in the next five years and Nissan and Daimler may build cars at each other’s plants in U.S. but there are no plans to build new factories, Carlos Ghosn said in an interview after the announcement.

The Renault-Nissan alliance is 11-year old and two companies hold stakes in each other. Nissan controls 15% stake in Renault and in turn France based Renault has 44% stake in the company.