Mercedes Deal With Renault-Nissan Gets Mixed Reviews

It was a case of competing quotes when Daimler and the Renault-Nissan Alliance announced a strategic partnership in Brussels on Wednesday morning.

Voltaire and Friedrich Nietzsche were invoked, but perhaps the alliance chief executive, Carlos Ghosn, was most apropos in his citation of Georg Wilhelm Friedrich Hegel: “Nothing great in the world has ever been accomplished without passion.”

Mr. Ghosn and Dieter Zetsche, chairman of the board of management of Daimler, are clearly bringing passion to their partnership. At the press conference, Mr. Zetsche dispelled any comparison between the new partnership and Daimler’s ill-fated merger with Chrysler.

“When we came together with Chrysler, we were in agreement on the merger, but hadn’t had much thought on the content of the cooperation,” Mr. Zetsche said. In contrast, he said, Daimler and the alliance had been working on the specific product collaborations for several months.

The automakers are moving cautiously. The agreement, Mr. Ghosn said, reflects “our shared belief in how the auto industry will have to evolve.” A clear impetus for both manufacturers is the strong fuel economy/greenhouse gas regulations in both Europe and the United States. But opinion seems divided on whether the partnership will work.

John Wolkonowicz, associate director of automotive research at IHS Global Insight, is skeptical. “I’m not sure how well it is going to work,” he said. “Although it looks good on paper, Daimler has a bad track record of sharing technology with other automakers. Their experience with Chrysler is a prime example of that. They don’t want the Mercedes reputation sullied by lesser brands using their technology.”

One part of the deal will be a common architecture for the next-generation versions of Mercedes’ Smart (with four-seat and convertible versions) and the Renault Twingo city car, including co-development of diesel and gasoline engines. The cars will be produced at the Smart plant in Hambach, France, and the Renault plant in Novo Mesto, Slovenia.

Mr. Wolkonowicz said that the joining of the Smart and Twingo cars made sense, but Mercedes and Infiniti are “both playing in the premium market, and there will be cross-shopping.” In Brussels, both Mr. Ghosn and Mr. Zetsche sought to dispel any marketplace conflict between Infiniti and Mercedes, saying that internal research showed very little “cross-consideration” between the two brands.

More sanguine about the cooperation is James Bell, an executive market analyst at Kelley Blue Book.

“It makes sense when you see that the whole market has to go through a downsizing phase because of the obligations imposed by governments,” he said. “It’s expensive to do it alone. This gives Daimler a chance to be more diversified, and it gives the Alliance some technologies they don’t have.”

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