Nissan, Daimler to Join in Mexico

Japanese automaker Nissan and Germany’s Daimler are mulling plans for a joint factory in Mexico with the capacity to produce up to 200,000 vehicles annually for the US market, the financial daily Nikkei reported.The two firms are in advanced talks on the plant, which is expected to cost approximately $1 billion and begin churning out vehicles in mid-2014, the Japanese newspaper said Wednesday.

Under the proposed joint venture, the Japanese automaker would be in charge of building the plant while Daimler would take a capital stake in the operating company, according to Nikkei.

The location for the plant, which could manufacture Infiniti and Mercedes-Benz vehicles, the luxury lines of Nissan and Daimler, respectively, is to be decided before the year’s end, but Cuernavaca is in the running according to sources.

Nissan already has two plants in Mexico in the central cities of Aguascalientes and Cuernavaca that manufactured some 500,000 vehicles in the 2010 fiscal year, primarily for export to the US.

Daimler’s Mexican subsidiary, Grupo Daimler, oversees three business units, including Mercedes-Benz Mexico.

The new Mexican plant would provide several key competitive advantages to the automakers, including the ability to share investment costs, reduce expenditures on parts and promote technological cooperation, Nikkei reported.

In 2010, the Renault-Nissan alliance and Daimler signed a strategic accord to promote the joint development of small eco-friendly vehicles, reduce costs and gain market share in that segment.