Reasonable Engagement

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36

Daimler wants to solve several problems with a cooperation with Renault-Nissan. The new triumvirate has had different experiences with alliances.

By Hans-Hermann Nikolei and Bernd Glebe

It is not a new “marriage in heaven”, rather an engagement for reasons of reason. The auto alliance with Renault and Nissan is supposed to solve several pressing problems of Daimler boss Dieter Zetsche in one go. In focus: reducing costs and bringing attractive models onto the market in the increasingly important compact car segment. In return, the Stuttgart-based engines make their large models available. According to experts, Renault and Nissan could also benefit from Mercedes' premium image.

Manageable risk

Zetsche is under great pressure. He has to present a viable future strategy in order to get the carmaker back on track after slipping into the deep red. CFO Bodo Uebber also recently announced that the Swabians will continue to turn over every penny to keep costs down.

It is not to be expected that Daimler is now on the way to another financial hussar ride with the cooperation. The car manufacturers want to bind each other through a mutual equity stake of only around three percent. So the risk - unlike the transatlantic car marriage with Chrysler - is manageable. On the other hand, the fact that the French car manufacturer Renault and the Japanese group Nissan have been forming a close alliance since 1999 could have a positive effect on the new alliance.

Cultural independence

While Zetsche got a bloody nose with Chrysler in the USA, Renault boss Carlos Ghosn forged the most successful global alliance in the automotive sector with the Japanese. The Lebanon-born Brazilian with a French passport is also Nissan boss. He brought together the global strategies and technologies of the sister companies with great success. Unlike Daimler at Chrysler or before that at Mitsubishi, he propagated the cultural independence of the partners.

Specifically, the cooperation between Daimler and Renault-Nissan could relate to the exchange of vehicle components and a joint production platform for Renault models and the future variants of the Daimler A- and B-Class and the smart. There is also likely to be closer cooperation for delivery vans and low-emission engines. Renault has invested a lot in the electric motor, Daimler in hybrid drives. Nissan should also be able to use Daimler engines for its large models.

Necessary U-turn

Experts now assume that Daimler can save around 500 million euros just by jointly developing a new version of the four-seater smart. At least as important, however, is the long-announced and now finally completed strategy change in the compact car segment.

According to the auto expert Willi Diez, the share of small cars in total sales in Europe rose from almost 33 percent in 2000 to 45 percent in 2009. However, the sales figures for the once hopeful smart went by 18 percent in the previous year and in the first three months this year by almost a third. By working together with the new partners, the city car could now turn the corner, which is urgently needed. In return, Daimler could now help Renault to achieve the quantities necessary for stable profits in engine construction and platforms for delivery vans and city cars. The French had also posted deep red numbers last year.

"Quiet partner" in Paris

However, Daimler has to reckon with a "silent partner" at Allianz: the French state. Ghosn made Renault the most globalized European car manufacturer, producing four out of five cars abroad. But that earned him violent scolding from the government. When Ghosn needed loan help during the banking crisis, President Nicolas Sarkozy helped him out of a tight spot with three billion euros. And he opens the state bag for the electric cars on which Ghosn Renault's future is counting.

In return, Sarkozy secures direct influence on the car manufacturer: He sends two more intervening state representatives to the board of directors. In addition, two "independents by Sarkozy's grace" are to be added. The state also joins Renault's strategy committee. Industry Minister Christian Estrosi pointed out the limits to Ghosn and Zetsche even before the official signing of their partnership, expected on Wednesday. France is demanding that the alliance create jobs in France, he said. In addition, the state must remain Renault's largest shareholder with 15 percent. (dpa)