PARIS -- If incoming Daimler CEO Ola Kallenius lets the automaker's joint projects with the Renault-Nissan alliance lapse, it would mean the end of a nearly 10-year engineering and industrial partnership for passenger cars, vans, pickups and engines.
Carlos Ghosn's downfall at Renault-Nissan and Dieter Zetsche's retirement as CEO of Mercedes-Benz maker Daimler looks likely to end what became known as the "Carlos-Dieter road show."
Incoming Daimler CEO Ola Kallenius, who will succeed Zetsche on May 22, will not renew common projects with Renault and Nissan, Germany's Manager Magazin reported. Kallenius wants to focus of Daimler's growing partnership with premium rival BMW, the magazine said.
The partnership started in April 2010, with Daimler taking a 3.1 percent share in both Renault and Nissan, and Renault and Nissan each holding a 1.55 percent share in Daimler. The scope of the original collaboration in 2010 was limited to three projects primarily in Europe but it grew to 12 projects including a joint factory in Mexico, Nissan supplying Mercedes with the X-class pickup
However, no new projects have been announced in several years, and Zetsche's retirement and Ghosn's absence leave the partnership without strong advocates.
Daimler's announcement last month that it wll create a joint venture with Zhejiang Geely Holding Group to build Smart cars in China for global markets is expected to mark the end of a cooperation to base the Smart ForTwo and ForFour cars off the Renault Twingo platform.
Thierry Bollore, Renault's new CEO, was noncommittal when asked about the future of the Daimler collaboration at the Geneva auto show in March, saying only that Daimler remained a "key partner" with Renault outside the cross-shareholdings.
Ghosn, who led the Renault-Nissan alliance and led Renault until his arrest in December on charges of financial crimes, and Zetsche co-chaired a Cooperation Committee that managed the partnership. The two executives said the personal chemistry between them was good and they regularly appeared together at joint news conferences at the Frankfurt and Paris auto shows to announce new projects and offer their views on the collaborations.
At their last joint appearance, at Paris show in September, Ghosn and Zetsche said they were ready to "deepen" their partnership, with Ghosn saying there were "still a number of areas of cooperation to explore" including car-sharing, connected and autonomous vehicles, and electrification.
Even if the current projects are allowed to lapse and no new ones are announced, the companies' cross-shareholdings remain significant. At Daimler's current market capitalization value of 63.7 billion euros, the alliance's stake in Daimler would be worth nearly 2 billion euros. The Renault-Nissan alliance is the third-largest single shareholder in Daimler, after Geely Holding Chairman Li Shufu and the Kuwait Sovereign Savings Fund.
The partnership is reflected in several categories on Renault's balance sheet. Renault's sales to partners declined by 1.8 percent in 2018, due to the shutdown of Iranian operations and declines in diesel sales in Europe, including to Mercedes. In 2018, Renault produced 71,998 vehicles for Daimler, a 5.5 decrease from 2017.
A Renault spokesman said the company would not comment on the Manager Magazin report, noting that Kallenius had not yet taken over at Daimler. He said that, in any event, all projects would be honored until their end date.
To date, the Daimler and Renault-Nissan tie-up has produced more than a dozen projects, including:
- The development of a shared architecture for the rear-engine Renault Twingo and Smart models. The four-door Twingo and Smart ForFour have been manufactured at Renault's factory in Novo Mesto, Slovenia, since 2014. In addition, Renault builds motors for electric versions of the Smart ForTwo at its factory in Cleon, France.
- Production of the Mercedes Citan small van, a version of the Renault Kangoo, at Renault's factory in Mauberge, France, since 2012.
- Renault and Daimler have developed a high-efficiency turbocharged 1.3 liter direct-injection gasoline engine. It debuted in the Renault Scenic crossover and Megane hatchbacks in 2018 and is also used in front-wheel-drive Mercedes models such as the A Class. The engine is seen as a key to reducing fleet emissions in the wake of slumping diesel sales, especially for small and midsize cars.
- Mercedes uses Renault's 1.6-liter four-cylinder diesel engines coupled with Renault transmissions in the Vito front-wheel-drive medium van. A 1.5-liter diesel produced by Renault in Valladolid, Spain, is used in entry-level versions of the Mercedes A- and B-class models, as well as the CLA and GLA crossovers.
- The Nissan Navara one-ton pickup is the basis for the Renault Alaskan and Mercedes X class. They are built at Nissan's factory in Spain and will also be produced at Renault's plant in Argentina.
- Daimler architecture was used as a base for the Infiniti Q30 and QX30 built at Nissan's factory in Sunderland, England. Production of the two cars will end next year when Infiniti ends sales in western Europe. A jointly owned factory in Aguascalientes, Mexico, makes the Infiniti QX50 crossover, but plans for a co-developed luxury compact car to be built there were reportedly scrapped last year, as consumer taste shifts to crossovers and SUVs.
- Nissan produces engines for Daimler at its factory in Decherd, Tennessee.