Daimler, Renault Forge Small Car Partnership

The next generation Smart line will be crafted with Renault-Nissan's help.

The winds of change continue to sweep the auto industry as car manufacturers face the new realities of an ultra-competitive and often distressed global car market.

Market Survival

Sales are on the rebound around the globe but after the bloodletting of 2009, car companies realize that in order to survive, they must cooperate. And, short of outright mergers and acquisitions, new arrangements include forging key alliances to build certain models.

Daimler and Renault with its partner, Nissan, have forged an agreement whereby the three companies will share technologies, platforms and a host of other features across their small car lines. Specifically, Daimler–who produces Mercedes and Smart cars–will be able to join with Nissan and Renault to build its smallest cars. That arrangement was initially hatched more than a year ago when Daimler and Renault-Nissan agreed on a small car deal that would yield the next generation Smart car model.

Component Sharing

Now, the latest agreement goes a step further as Mercedes will share some of the components powering its A and B segment vehicles with Renault and Nissan products. Importantly, Daimler will supply the electric technology which will power these small cars while Renault will supply three three-cylinder gas engines. No diesel engines are in the proposed mix.

The decision to allow Mercedes to supply the electric components comes as surprise given that the Nissan LEAF, a battery electric car, will debut later this year. Thanks to Nissan technology, the LEAF will be one of the first pure electric cars when it hits the market.

Special Deal

By crafting the deal, Daimler will not become the third part to a three-legged car manufacturer stool. Nissan-Renault had been looking for a third partner for several years, first talking with General Motors and then with Chrysler before cutting off those talks.

Daimler is wary of crafting any sort of arrangement with anyone but a premium car manufacturer but tying its small car lines in with Renault and Nissan will allow the German automaker to share a number of key components without sharing platforms in entirety.

Neither Mercedes A-Class or B-Class models are sold in the US, a market which perceives Mercedes as strictly a luxury car manufacturer. However, with tighter EPA guidelines coming down the pike, Mercedes may introduce its A and B segment models to the US or expand its Smart brand to fill that gap.

Will there be more deals forthcoming between Daimler and its new partners? Quite possibly, especially if Daimler and Nissan can forge some sort of agreement for their luxury brands, Mercedes and Infiniti.

Source: Automobile magazine

Saturn Offers Renault A Way To The USA

The Penske Group hasn’t acquired the Saturn brand from General Motors yet, but as soon as the proposed sale was confirmed in June, speculation on the direction that Saturn might go has been rampant.

Some viewed Saturn as simply becoming a retailer for other makes, particularly those brands without a presence in the US market. With more than three hundred surviving Saturn dealerships scattered across the USA, that might allow Tata Motors, Proton Motors, Samsung, Renault and a handful of Chinese makes to gain an important foothold in the highly competitive and expensive to enter the US market.

Renault To Make A USA Return?

But I doubt that Penske, who is the exclusive distributor of Smart cars in the US would be satisfied with playing second fiddle instead of having full market control as he has over the ForTwo. Now, it appears that one of the potential retail customers, Renault, may use Saturn as a way for it to return to the US market which they abandoned shortly after selling off the American Motors Corporation (AMC) to Chrysler during the late 1980s.

If Renault were to sell its cars through Saturn, it would also be able to circumvent gaining Nissan’s approval for the deal as Nissan and Renault are joined at the hip. There had been talk that Saturn would sell cars built by Renault Samsung Motors, a Korean automaker, whose cars are badge engineered Nissan models. But by directly selling Renault built and designed cars in the US, Renault wouldn’t be involving Nissan in the deal.

No Deal Finalized Yet

Automotive News and other industry folks were reporting on this idea, noting that it won’t be until the end of September before Penske will be able to close on Saturn.  No Renault vehicles would be available for the 2010 model year, but conceivably under this plan Saturn dealers might be able to sell 2011 models by next summer.

Details of the Saturn deal still have to be hammered out, with Penske not expected to acquire manufacturing capacity from GM for Saturn. This means that Penske will be totally reliable on other suppliers, including GM, to provide vehicles for Saturn which might be a tough sell without an exclusive distribution agreement with Renault.

Competition For GM?

With Saturn, Hummer and Opel on the block and Pontiac preparing to close down, GM needs to get past its current woes in order to move forward. No telling what sort of competition the Renault brand will be to GM and others, but with a full line of cars to choose from, the French automaker could come back to bite GM.

See Also — Nissan, Renault To Tackle Tata Nano

Nissan, Renault Mark Ten Year Alliance Anniversary

In 1999, French automaker Renault and Japanese automaker Nissan began their historic global alliance. Both companies ended up taking significant stakes in each other while allowing Renault Chairman and CEO, Carlos Ghosn, to also assume leadership of Nissan. Short of an outright merger, the agreement has allowed both companies to operate independently while collaborating on a number of projects and cooperating elsewhere.

Celebrating Ten Years Of Alliance

As Renault-Nissan marks the tenth anniversary of the alliance, the two automakers have announced that they will take steps to help bring both companies closer together, seen as being all the more important due to the current economic climate.

“Over the last decade, we used the Alliance to develop win-win synergies between Renault and Nissan, and that approach worked well when both were profitable and growing,” says Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance.  “Today, we have to move faster. Seeking synergies is no longer optional, but mandatory.  We have assigned a group of experts to focus on building greater synergies to get us through the crisis and position us competitively for the future.”

The Third Largest Automobile Entity In The World

Over the past ten years, those synergies have included sharing vehicle platforms, transmissions, engines and technologies. In addition, the two automakers have seen their combined annual vehicle sales grow from 4.9 million units in 1999 to 6.9 million in 2009, making the Alliance the third largest automobile manufacturer in the world.

Among the changes for the Alliance expected over the coming years include greater sharing of the purchasing of raw materials; expansion of joint powertrain component development; sharing of production facilities;  broadening platform sharing and compenents; research and development; information systems and more.

For 2009, some €1.5 billion in what is being called “synergies” to be evenly divided by the two automakers will be spent to tighten the Alliance this year alone. Going forward, expect that quite a few Nissan and Renault vehicles will share key components and parts, bringing about the savings needed to help the companies remain strong in a highly competitive global marketplace.

Source: Nissan Motor Company

See Also — Carlos Ghosn Bullish On Vehicle Electrification