Mercedes And Nissan Joint Venture Could Collapse In Mexico
The manufacturing joint venture between Mercedes-Benz and Nissan in Mexico is thought to be on shaky ground and may not continue beyond the middle of the decade.
The German automaker joined forces with the Renault-Nissan alliance in 2010 to share vehicle and powertrain technologies. They also operate an assembly plant in Aguascalientes, Mexico that builds the Mercedes GLB, Infiniti QX50 and QX55.
While recently speaking during Mercedes-Benz’s quarterly earnings call, chief executive Ola Kallenius said the long-term prospects of the partnership had yet to be decided.
“We have a good partnership with Nissan, and it’s supposed to stay this way for the next three years,” Kallenius said. “What will happen after that, we haven’t decided yet.”
Auto News states that the joint venture and the future of the assembly plant is at risk with the companies shifting their U.S. lineups towards electric vehicles. Both LMC Automotive and AutoForecast Solutions assert production could end at the site in the middle of the decade.
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“The outlook for the underutilized COMPAS plant is dim because there’s no product allocated beyond 2026,” AutoForecast Solutions vice president Sam Fiorani said.
The factory operated by Mercedes-Benz and Renault Nissan has the capacity to build 230,000 vehicles annually but last year, just 108,681 vehicles were produced at the site. Production reached its peak in 2020 but still did not reach 50 per cent of capacity.
Dwindling production at the site is due in part to falling demand for the models built there. Indeed, U.S. sales of the Infiniti QX50 dropped by 42 per cent last year. Mercedes-Benz also decided to stop building the A-Class at the site in 2020 and returned production to its plant in Ranstatt, Germany.