Renault-Nissan and Daimler announce partnership

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Renault-Nissan and Daimler AG have announced a “wide ranging strategic cooperation,” specifically relating to the development of small cars and the sharing of gas and diesel powertrains, according to a company press release.  This marks the end of a multi-year search by Renault-Nissan, as the Franco-Japanese  company looked to form a partnership with another automaker to help bring down production costs and expand into new markets (such as India and China).  Rumors of an alliance with Chrysler or General Motors eventually led to nothing – other than splashy headlines and rampant speculation in the business section of every newspaper and automotive website.

The news comes as welcome relief to fans of the tiny Smart Fortwo, Daimler’s city-car brand which has recently struggled in the U.S.  Smart sales this year are roughly half that of 2009 – which were already half of 2008 levels, Smart’s first year in the U.S.   Renault-Nissan and Daimler will co-develop the next generation Renault Twingo and Smart Fortwo on the same platform.  This will include electric versions, along with a wider range of models for both the Smart and Twingo family of vehicles.   It’s likely Smart will revive its discontinued four-door model and, possibly, produce a new budget-priced small sports car.

The deal also includes Daimler’s agreement to provide a range of diesel and gasoline-powered engines to Infiniti, Nissan’s luxury brand which only recently entered the European market.  In return, Renault will share a diesel engine and transmission with the Mercedes-Benz Vito van.  Future collaboration in the field of light commercial vehicles is also part of the deal, as is a one-time cross-shareholding – amounting to 3.1 percent of each company’s equity capital – and long-term “synergies” in product development and parts purchasing.