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Indego / IndeGo Forum / Daimler Renault deal will have wideapread impact

Daimler Renault deal will have wideapread impact


Wednesday, 07 April 2010 17:26

The alliance announced  today  between  Daimler AG  and  Renault has been widely predicted and commented on for some weeks, including the 3.1% cross-shareholdings (split between Renault and Nissan in the case of the investment in Daimler).  However, whilst this deal was expected to focus on small cars, providing future product for Daimler's smart brand, and economies of scale for Renault-Nissan through supplying the platform and powertrain, the small print contains a number of other areas of collaboration, and the implications reach well beyond the three parties directly involved.
Although many would argue that the alliance does not fundamentally change the position of Renault, it has at least opened up a new front in its defences.  It now has an alliance with Nissan, its investment in Samsung in Korea, a shareholding in Avtovaz, and the new alliance with Daimler.  Perhaps this adds complication rather than guaranteed success, but by comparison, it makes PSA (Peugeot Citroen) look very lonely.  PSA has a number of very successful and long-standing product alliances - with Fiat on commercial vehicles, with Ford on engines, and with Mitsubishi on SUVs and electric vehicles.  But it remains in a weak financial position relative to other carmakers, and recent discussions with Mitsubishi on a cross-shareholding and closer alliance were called off in January.  So does the Daimler-Renault-Nissan alliance leave PSA more vulnerable?

The second interesting aspect to the full announcement of the alliance is that Renault will supply Mercedes with an entry level light commercial vehicle from 2012.  From the Daimler announcement, it is clear that this will slot in below Vito - effectively a replacement for the A-Class based Viano.  However, the Renault-Nissan-GM collaboration on the mid size van (Trafic/Primastar/Vivano) is drawing to a close and the deal is not yet done with GM for a continuation of that collaboration.  I also believe that the alliance between Renault and Nissan will weaken with the launch of new Nissan products in the 2012-2013 timeframe.  So is GM also going to be a potential casualty of this new alliance, looking for a new LCV partner, or potentially being forced to exit this part of the market.  One of the side-effects would be the closure of the Luton factory - some would see this as inevitable anyway, but it is still another sad day for the UK motor industry.

Other potential casualties include the smart plant in Hambach, France, that currently produces the fortwo (how long can that unique architecture survive if the engineering comes from Renault?), Mitsubishi who supply the current gasoline engine for the fortwo providing them with some much-needed economies of scale, and the Japanese premium brands, Lexus and Acura, who will face a stronger competitor in Infiniti using Mercedes engines.

Interesting times....

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