Daimler and Renault-Nissan's premium car brands have plenty of scope for further collaboration, which could improve the cost bases of both companies and speed up new model development.
IHS Automotive perspective | |
Significance | Infiniti's president announced earlier this week at the NAIAS that his company and Daimler were looking at a plan to develop a new large platform to underpin up to four new models. |
Implications | If the plan comes to fruition it would lead to an enhanced relationship between Mercedes-Benz and Infiniti – in addition to the existing arrangement to share Daimler's MFA architecture – which could have a positive impact on the cost bases and new model turnaround time of both companies. |
Outlook | Enhanced collaborations between premium carmakers appear a compelling strategy at a time of ever growing technological sophistication and cost of vehicle content and associated cost challenges presented by alternative powertrain technology. |
At this week's NAIAS in Detroit the president if the Renault-Nissan's premium brand Infiniti Johan de Nysschen revealed that his company and Daimler were in discussions to collaborate on developing a new large car platform (see United States: 15 January 2014: NAIAS 2014: Infiniti to develop joint platform with Daimler for four new models). He told the Financial Times (FT) that, "We are discussing right now and examining the potential of extending that into a second vehicle project. We are looking at a versatile platform for larger vehicles, both rear-wheel drive and four-wheel drive that could form the basis for sedans and SUVs." The project would be key to Infiniti's plans to triple sales between 2013 and 2020 to a highly ambitious target of 500,000 units. To achieve that level of sales, Infiniti would have to be able to develop a new range of large cars quickly to go with its existing range, which is biased towards mid-sized sedans, coupés and SUV/crossovers. Daimler and Infiniti have already agreed a collaboration deal as part of the wider alliance between Daimler and Renault-Nissan. This agreement will see Infiniti use Daimler's MFA architecture on its new entry-level Q30 crossover.
Outlook and implications
There is no doubt that there are significant potential benefits for both Daimler and its Mercedes-Benz brand and Nissan's Infiniti as a result of closer co-operative ties between the two premium carmakers. Infiniti has hugely ambitious sales growth targets which will only be met by range expansion and investing further in increasing market share in Europe, Russia and China. The need for a new large platform on which large rear-drive and 4WD is particularly obvious for Infiniti. The platform under discussion could end up underpinning the QX70 as well as the Q70 sedan replacements as well as expanded range of large sedans, coupés, SUVs and crossovers for the US market. It would also give Infiniti a new architecture to launch an all-new large sedan and SUV/crossover model programme for the European and Chinese markets.
A shared platform to underpin these models and future Mercedes-Benz models will result in considerable R&D savings and synergies as well as the possibility of a joint future production project along the lines of the mooted plan to shared production between the Mercedes-Benz GLA-Class and the Infiniti models at Nissan's plant at Aguascalientes, Mexico. Reuters reported back in September (see Mexico - Europe: 4 September 2013: Mercedes-Benz GLA and Infiniti Q30 expected for joint Mexico production – report) that this was close to coming to fruition. At the time Daimler spokesperson Andreas Renschler told the Frankfurter Allgemeine Zeitung that, "This would be an option, if our compact cars business in North America performs well," adding, "It will be decided at the end of the year". As yet, no official announcement has been made. While collaborating with Daimler will make the entire new model R&D process quicker and cheaper for Infiniti the benefits for Daimler are also obvious. Following the decision to disband its association with Chrysler, the company has been searching for meaningful partnerships to improve scalability on its platforms as well as significantly enhancing purchasing economies. It is possible that the alliance with Infiniti could offer the sort of relationship that Daimler was looking to form with BMW a few years ago in an effort to lower its purchasing costs through increasing scale. However, this relationship has never really appeared to have evolved despite extensive discussions and a toe-in-the water purchasing arrangement on seat frames (see Germany: 26 July 2010: BMW and Mercedes-Benz Launch Co-Operation with Seat Frames). It is possible that two such close, obvious and traditional competitors have found ways to work together on common savings an overly difficult process. A close relationship with Infiniti has the potential to deliver on savings on HVAC, electronics and telematics systems that are an increasingly cost-intensive component of developing and manufacturing premium vehicles.
In addition, as already reported last September, it is also possible that the second-generation MFA architecture could be a joint project between Daimler and Renault-Nissan. Nissan's executive vice-president Andy Palmer told Autocar at the Frankfurt Motor Show, "Daimler needs an MFA successor and we need more cars in that segment… There's now a study to see if we can develop a joint platform. Step two would be common manufacturing, which is also part of the study." Given the increasingly cost-intensive process that is involved in developing premium vehicles, as a result of high technology content, and the further pressures imposed by the move towards alternative powertrains, these kind of enhanced collaborations between premium carmakers can only help these companies improve margins and meet their cost targets.