Clear as daylight when you look at it: Nissan needed help with the world’s dreariest luxury brand, the Invisibiliti. Daimler needed help with the cost of becoming a full-range manufacturer and dealing with Smart which is well past its best.
So Carlos Ghosn gets Mercedes engines to put in his Infiniti E, F and G cars. Smart gets a bit of Twingo twang in the next generation two and four-seaters. Nissan will share its electric motors for small cars with Mercedes. The Mercedes-BMW engine joint venture perished some time ago.
Go deeper with GlobalData
The fact that it perished shows just how difficult it can be to get rivals to work together however close they live and how hard they try. Dieter Zetsche knows that well enough having failed to get anything of value out of the Daimler-Chrysler alliance – a fact that he was reminded about ever-so-gently during the press conference in Brussels.
Zetsche might still be a joint-venture amateur, but Ghosn has form in banging heads together and making good things happen. He skittishly reminded his inquisitors that when he announced the Franco-Japanese alliance 11 years ago there was widespread cynicism. There was no way that those two cultures could share common goals.
Ghosn enjoyed that little moment and drew from it: “You know that what doesn’t kill you makes you stronger.”
He’s adjusted his focus more than a bit. Not so long ago he was knocking on doors in Detroit with a plan in his bag for a grand tri-continental alliance that would bring huge scale and therefore great financial benefits.
He had the doors shut in his face which was a piece of luck because moments later they were all insolvent. He has now handed that dog-eared piece of strategy to Sergio Marchionne at Fiat who is still pitching for the magic minimum volume of six million units a year.
At the Renault-Nissan-Mercedes presentation there was no talk at all about benefits of scale. None. There was not even a casual totting up of joint volume (which with commercial vehicles would run to around eight million). Volume alone has shown not to work, he said. “Scale is just complexity and confusion.” And how hard the American makers have laboured to prove that to be true.
The driver of this alliance, and others still to come, is the cost of new technologies – be they incurred together or separately. And that’s not just the cost of research, development and manufacture of an electric power pack. There is the cost of selling it too. As Mitsubishi UK has just shown, it is hard work selling an electric car for more than its cost of manufacture. Even in this strange new world where everyone knows the cost of everything but the street value of nothing, there is still room for gales of laughter when a tiny little Mitsubishi i-MiEV comes in at the price of a new Jag.
There is scope for a lot more gleam in the new products if we are to be excited about them and prepared to pay the price. The boys with the task of making small new-generation technology cars will have to be aware of that. Less of the scale. More of the polish.
Rob Golding
See also: Renault-Nissan alliance allies with Daimler
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
Related Company Profiles
Mercedes-Benz Group AG
Renault-Nissan
DaimlerChrysler AG
Smart Holdings, Inc.
Mitsubishi Corp