Nissan and Daimler have been working in partnership since 2010, but their latest project is the largest collaboration ever between the two corporations. Together, the companies are building a factory in Mexico, a project which will cost $1.36 billion.
Both Daimler and Nissan are getting something very valuable out of the deal. Nissan will be able to use some of the technology Daimler has developed in its own cars, and Daimler gets a new site at which to produce Mercedes-Benz vehicles. The Mexico factory will supplement Diamler's assembly plant in Alabama.
"In Aguascalientes, we will take our successful partnership to the next level by combining the skills of our two companies Daimler and Nissan in one production plant," Daimler Chief Executive Dieter Zetsche said in a statement. "Just over four years after the cooperation was founded, the decision for the new plant in Mexico is a major milestone."
Now that the two companies have enjoyed continuous collaboration for four years, some are wondering if a merger is imminent. However, Daimler and Nissan have no plans to merge permanently.
"The cooperation is so successful because it is not the result of a merger," Zetsche told Reuters.
Vehicles made by Daimler and Nissan have shared manufacturing facilities as well as engines and other parts before. The Mexico factory is an extension of that cooperation, and will reduce costs even further for both companies. The alliance is a loose one, held together only by each company owning shares in the other, but that may be part of what makes is so successful. Each company could survive on its own if the other goes under, and the two are still competing in the open market, although they are making efforts to ensure their vehicles aren't too similar. This motivates each company to continue innovating, while the sharing of technology helps put both ahead of other competitors.
The new factory will begin producing Infiniti vehicles in 2017, with Mercedes-Benz to follow in 2018. Once full-scale production is achieved in 2021, the factory will employ nearly 5,700 workers. It is also expected to indirectly create 10,000 jobs in parts manufacturing and other related industries.
Mexico is quickly becoming a popular location among car manufacturers. It enables easier import of vehicles to the U.S. while also providing lower labor costs than many other countries. According to a previous article on Tech Times, other manufacturers such as BMW and Audi are also working on factories in Mexico.
