Little by little, the alliance between these manufacturers is fading. The projected growth ambitions have not materialized, they have excess capacity, and the factories set up ad hoc see their continuity in danger. A possible way out of the crisis is to bet on electric cars.
The legacy of Carlos Ghosn, the ousted executive of the Renault Nissan Mitsubishi Alliance, continues to turn to dust. This time we are talking about the alliance between Nissan and Mercedes-Benz in the United States, their joint factories are in danger due to lack of activity, and they have been that way for a long time.
It will be 12 years since a collaboration between Nissan and Mercedes-Benz, then headed by Dieter “moustaches” Zetsche, was announced to jointly develop models and engines. Part of the fruits of that alliance were the Infiniti Q30 and QX30, destined for the European market.
Nissan has had the Infiniti brand since 1989, initially for the United States and Canada, which dared to enter the European market in 2008. Its incipient success fizzled out in a short time, reaching its peak in 2016 and announcing its withdrawal in 2019 for the year 2020. In Europe, Infiniti was a dud.
Dieter Zetsche (left) and Carlos Ghosn (right) in a file image
However, they still collaborate in North America, albeit less and less. In Decherd, in the State of Tennessee, both manufacturers built an engine factory in 2014 with a capacity for 250,000 units per year. It has never been used even half, and that is a problem for the accounts to come out. In fact, they don’t come out.
In 2019, the four-cylinder engines for the Infiniti Q50 were discontinued, and currently only the M270s are produced for some Mercedes-Benz models: the GLE-Class and the Sprinter and Metris (in Spain, Vito) vans. In 2020 some 50,000 engines were produced there.
The M270 engines are going out of production next year, and in the absence of further allocations, the plant has only one destination: closure. Its 400 employees will relocate to other facilities. The end of production of these engines was planned, for the record, but there will be no replacement for them.
Cooperation Manufacturing Plant Aguascalientes, located near the Nissan factory built in 1992
One possible job assignment could come from the electrification that Mercedes-Benz and Nissan have committed to. On the one hand, the manufacturer of the star will focus on electric cars, and regarding Nissan, it has committed 18,000 million dollars in the matter.
But another issue of friction is what will happen to the joint factory COMPAS (of Cooperation Manufacturing Plant Aguascalientes) in Mexico, where the Mercedes-Benz GLB and the Infiniti QX50 and QX55 are currently produced. Infiniti has the problem that its range is aging and its sales are falling. From 2026 they can lose their jobs if there are no more orders, before 10 years of activity.
COMPAS was announced in 2014 and launched in 2017
These facilities are also operating at less than 50% capacity, thus having their best year since they began operating. For both manufacturers, the disbursement was important, 1,400 million dollars, an amount that we have to add to the 319 million dollars of the engine factory.
Mercedes-Benz GLB, a model that replaced the Class A in COMPAS after only two years of production, due to the rise of crossover In U.S.A
Not all of Carlos Ghosn’s bets turned out well, the growth of Infiniti was one of them. The Japanese brand has failed to establish itself, a problem that Lexus has not had, and its product lacks freshness. In addition, new players have entered the Premium market with more audacious proposals, see Tesla.
This failure has a consequence, and that is that the industrial capacity that had to sustain this growth has not been used. On the part of Mercedes-Benz, some of its alliances have been regular, this has been one of them. It maintains the alliance with Renault, although not with as many models and engines as before.
Both Mercedes-Benz and Nissan have one more chance to learn from everything that has gone wrong in their joint venture, both in Europe and North America, and lay the groundwork so it doesn’t happen again. They wanted to grow more than was possible.