Daimler AG looking for a partner to co-develop future small/compact models

[Der Hofmeister]

Daimler is currently in talks with several companies as to eventually establish a partnership for building its future range of small-sized and compact cars.

The information was revealed by Dr. Dieter Zetsche, the President of the Board of Management of Daimler AG, during an interview with Handelsblatt, a German daily newspaper. At this moment, among the potential partners, the most likely to be signed an agreement with and also the most rumoured one is Renault. The French group is keen to find a suitable, as well as low-cost, shared technical platform for developing small/compact models;on the other hand, Daimler is seeking an attractive and new range of powerplants to be installed under the hood of the forthcoming A- & B-Klasse replacers. We should get a definitive answer by mid-2010, when Daimler AG is said to officially announce the deal.

In the past, Daimler and BMW had been in talks for a possible cooperation, but the discussions never had a positive outcome.

1. BREAKING NEWS: Daimler and BMW to announce possible partnership at the end of November

2. Daimler & BMW on the way to partnership

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Mercedes-Benz-Blog -- Unmistakable. Unique. Classy. Mercedes-Benz.: Daimler AG looking for a partner to co-develop future small/compact models

 

[Beemer B773ER]

I guess talks with Toyota Motor Corp. didn't very far either.

Why can't they do it themselves? ...I mean, this is Mercedes-Benz we're talking about.

 

[bum-man]

Lots of things, but the one that sticks into my mind is the fact that high volume low profit cars are a very risky business venture. Especially when you are going to put a premium on the price...Which you know Mercedes will do. Personally I think they should pull out. These aren't real Mercedes-Benz's.

 

[coolraoul]

It's stupid to do that alone for a carmaker as MB, because the volumes are too low to justify it. So, either do it the Mini way (expensive, but different and trendy), or do it with a volume carmaker.

They tried the Mini way with the smart Forfour... Now they're trying to do it with another carmaker, so the investment can be significantly lowered, allowing a better car for the price. Now the key is to distantiate the MB product from the Renault one enough to somehow justify the premium.

They cannot not do that either, need to lower the fleet CO2 emissions... But they could label those cars as smart, not MB... however the Forfour proved nobody's willing to pay more for a smart than for a Renault, so more money to be made by labelling it MB.

I hate the current A and B, not because they're too small or too affordable, but because they're vastly inferior to the competition in terms of comfort, drivetrain, refinement and all what shopuld make a Mercedes-Benz.

If they can make them as good as the 1er or A3, i'll welcome those cars.

 

[Deleted member 25]

But is the B class supposed to compete against the A3/1er ? I thought it was a van not a classic compact car.

 

[Shining Star]

But is the B class supposed to compete against the A3/1er ? I thought it was a van not a classic compact car.

The next generation B is supposed to spawn many different variations, some of which will compete with the 1er and A3.

 

[Wolfgang]

More Daimler Renault talks

PARIS (REUTERS)

[...]

Renault was also in "active talks" with German rival Daimler over a global industrial partnership, the paper said, citing an industrial source.

The talks covered common platforms for the future Smart range, the electric car, and engine and technology exchanges, the paper said.

Cooperation on the future Mercedes A and B cars could also be in the cards, while Japan's Nissan, which is 44 percent-owned by Renault, should also be part of the partnership deal.

Discussions do not involve any equity stake swap, La Tribune said.

In December Renault Chief Operating Officer Patrick Pelata already said Renault was in talks with Daimler and others about partnerships and that areas covered included engines, transmission platforms and access to new technologies.

(Reporting by Dominique Vidalon; additional reporting by Helen Beresford; Editing by Steve Orlofsky)

PS. Here's an update on recent Renault battery business development:

Renault-Nissan CEO Carlos Ghosn earlier this year declared owning battery technology is a core requirement for any auto maker.

The Renault-Nissan Alliance is building a 100,000-unit battery factory in France with support from the French atomic energy commission and the French Strategic Investment Fund.

SK Energy is a petrochemical and energy company that began making Li-ion batteries for mobile devices in 2005. SB LiMotive is a 2008 JV between Robert Bosch Stiftung GmbH and Samsung SDI Co. Ltd. that recently announced its first contract with BMW AG.

SK Energy has developed six different Li-ion cells for hybrid, plug-in and battery EVs and was chosen in October to supply Mitsubishi Fuso Truck and Bus Corp. HEVs – one of the projects of Daimler AG’s global hybrid center, which owns Mitsubishi Fuso.

http://wardsauto.com/ar/renault_pushes_battery_091207/

 

[Wolfgang]

Daimler, Renault still talking, Zetsche says

just an update, nothing new, more delays...



Diana T. Kurylko, Automotive News Europe

DETROIT -- Daimler AG CEO Dieter Zetsche said discussions with French automaker Renault SA will be completed by mid-year, but he would not say whether the talks concern cooperation on future Smart cars as has been reported.

Zetsche did say that developing the next-generation two-seat minicar and a second vehicle for Smart depends on finding a partner. He said Smart needs higher volume and a better cost base and that the lineup must expand beyond one model.

Zetsche said a decision on Smart will be reached in the second half of the year.

According to media reports, Germany's Daimler and Renault have been talking about developing a rear-drive platform for the next-generation Smart ForTwo as well as a four-seat car for the brand.

Smart once offered a four-seat vehicle, the ForFour, which was the result of a joint venture between Daimler and Mitsubishi Motors Corp. But the slow-selling model was discontinued after Daimler sold its minority stake in Mitsubishi.

Zetsche said about 1,000 Smart electric cars will be built this year. Of those, 200 will be marketed in the United States, but they will be offered only through leases, he said. By 2012, Smart expects production of the electric version production to reach “five digits.”

Zetsche also hinted that the Mercedes Benz C-class range could be expanded now that the CLK coupe and convertible have been moved from the C-class platform onto the larger E-class platform.

 

[HighestOfHigh]

My goodness...they are still looking. Seems like it is taking them forever. Guess we will see some results in 2014/15.

 

[Wolfgang]

Guess we will see some results in 2014/15.

True.

The discussion have now also been reported in the Japanese press:

Daimler eyes alliance with Nissan, Renault

DETROIT (Kyodo) The head of Daimler AG says the German carmaker is considering forming a partnership with Nissan Motor Co. if it can reach a deal on a proposed technological tieup with Renault SA.

"We have confirmed that we are in discussions with Renault. It is not just discussion, but there are other discussions going on as well," Daimler Chairman Dieter Zetsche

said Monday at the North American auto show

in Detroit.

"If the discussions (with Renault) would come to any results, then obviously the potential expansion with Nissan is something to consider," he said.

Zetsche said Daimler wants to strike a deal with Renault in the first half of this year.

Nissan and French maker Renault formed a capital tieup in 1999. If Daimler ties up with Nissan, the two are likely to work together on environmentally friendly vehicles, including electric cars, according to industry watchers.

http://search.japantimes.co.jp/cgi-bin/nb20100113a2.html

 

[HighestOfHigh]

I guess talks with Toyota Motor Corp. didn't very far either.

Why can't they do it themselves? ...I mean, this is Mercedes-Benz we're talking about.

I hate to say this...but it's because their being Lazy!

They are more concerned with their "Big Boy Toys" cars like the S-class, CLS, SL etc.

 

[Giannis]

I hate to say this...but it's because their being Lazy!

They are more concerned with their "Big Boy Toys" cars like the S-class, CLS, SL etc.

Developing an all new (small) type of car, without having any knowledge about this segment costs a lot of money. And Mercedes is a relatively small manufacturer to have all that money in cash, especially at these times where everyone is deep into the red numbers. It's not about being lazy.

 

[HighestOfHigh]

^Business wise yes. On the other hand a company that has the capabilities of building a masterpiece such as the S-class can surely build well engineered cars without teaming up with a partner. There is some laziness going on. It may be for good reason with the current recession.

To be honest Mercedes-Benz really doesn't NEED to go the small car route. If anything it cheapens the brands image. But it looks bad when Mercedes-Benz of all companies is going around trying to buddy up with someone. It just shows how desperate they are. I can't imagine this will help their image at all. The S-class bares that burden. Either way I feel it's going to be a big headache in the future for them.

I'd rather them just make Smart their lower price brand and just build better engineered small cars under Smart. Maybe even a Camry/Accord or Corolla/Civic fighter.

 

[Wolfgang]

Developing an all new (small) type of car, without having any knowledge about this segment costs a lot of money. And Mercedes is a relatively small manufacturer to have all that money in cash, especially at these times where everyone is deep into the red numbers. It's not about being lazy.

It might cost less if MB management didn't change their minds as often.


smart roadster

 

[HighestOfHigh]

^Yea that is a major issue as well.

 

[Giannis]

^Business wise yes. On the other hand a company that has the capabilities of building a masterpiece such as the S-class can surely build well engineered cars without teaming up with a partner. There is some laziness going on. It may be for good reason with the current recession.

To be honest Mercedes-Benz really doesn't NEED to go the small car route. If anything it cheapens the brands image. But it looks bad when Mercedes-Benz of all companies is going around trying to buddy up with someone. It just shows how desperate they are. I can't imagine this will help their image at all. The S-class bares that burden. Either way I feel it's going to be a big headache in the future for them.

I'd rather them just make Smart their lower price brand and just build better engineered small cars under Smart. Maybe even a Camry/Accord or Corolla/Civic fighter.

Having a small car in the line-up won't damage the brand at all. After all they have the A and B class, and they make trucks, buses and cheap, crappy cars, like the Vaneo and Vito, as well. So it's won't to any damage to the shining star.

As for the world laziness, it's not appropriate for any corporation the size of Mercedes Benz. It's not that they are lazy and they won't to it. The engineers are paid to design cars.

Also the fact that they have made the S-Class doesn't mean that anything else wearing the Mercedes badge is de facto great. First generation A Class, and cars like the Vaneo proved it.

And since they do not have the know how to bild proper small/ city cars, cars like the Opel Corsa, or the Ford Fiesta that is now comming to the States so you'll probably be more familiar with, it's completely logical and wise in my opinion to team up with a partner and share the costs of developing or buy existing technology. After all, a small car the size of a Fiesta is no S-Class. No top notch materials and attention to detail needed.

The only thing they have to do right, is make something that will sell. Because in this segment there is a lot of competition and money comes from selling in big numbers, not by selling in high price. Smart proved that

 

[HighestOfHigh]

Having a small car in the line-up won't damage the brand at all. After all they have the A and B class, and they make trucks, buses and cheap, crappy cars, like the Vaneo and Vito, as well. So it's won't to any damage to the shining star.

See that is the issue. If Mercedes-Benz plans on selling these cars in Europe alone, then that is fine. Over here Mercedes-Benz is seen a one of the highest forms of a luxury car. In talking to a lot of non-car enthusiasts here most of them don't even believe Audi and BMW are even on the same level as Mercedes. The S-class pretty much seen as the boss of car only second in command to the likes of Bentley and Rolls-Royce. And most of that is due to exclusivity and pricing of the other two.

With that in mind, people have a very high expectation of Mercedes-Benz over here. No one in there right mind would even think of making a cab out of one (suprisingly there are a few around, but they get a lot of odd looks). This is probably the main reason it took Smart so long to come over here. Probably also why we are not offered cars like the A/B and Vito classes over here. Most people don't even know those cars even exist unless they travel over to Europe.This is another reason why the C-class coupe/hatchback was pretty much a failure over here.

The problem with co-developing with lower end companies is that the finish product will really just be a watered down Benz with a few gadget to remind us that it's a Benz. Maybe Europe will love it, but I doubt it will be a huge success over here. God knows Benz doesn't need another "quality" issue.

Honestly, If they MUST co-develop with someone the best option is Toyota. Other then the current break issue they are very dependable cars.

And as far as Lazy goes...A CEO and board members can be LAZY. And so can designers, when their designs are approved by Lazy managers. At least thats what I gather from the constant remarks about the current Maybachs looks.

 

[Merc1]

Well truth be told Mercedes doesn't do small cars well. They've just learned how to get the C-Class right so they need help IMO. To save money and time on the small car basics. It makes sense to me.

Look at the Smart. RWD, poor-MPG and a joke of a transmission. For a car of the Smart's size it should get about 50 MPG or better and it sure as hell should require premium fuel!!! The Toyota IQ is going to murder it in the marketplace next year.

Mercedes needs all the help it can get when it steps outside its traditional strenghts which are med-large sedans, coupes and convertibles.

M

 

[Wolfgang]

Let's "ask" the dealer about the A/B class in the USA.


Automotive News asked:

Ernst Lieb, the CEO of Mercedes-Benz USA, has said there is no market for the Mercedes B-class small car in the United States. What do you think?

MB dealer Fletcher Jones answered:

I'm glad Ernst said that, because I'm of the same opinion. I'm not in favor of the B class coming to the U.S.

With the euro around 1.50 to the dollar, there are two issues. I don't know, from the Mercedes-Benz side, how they can make any money off the car. To price it where they'd need to, they'd have to be losing money.

And two, how are they going to get it to the price to compete with Honda or Toyota? People are willing to pay some premium for a Mercedes-Benz in any segment, but that's a very price-sensitive segment. I don't see that as their market.

In this country, I think it is very important that Mercedes-Benz maintains that luxury position. It can't be every person's car, or it loses what it has.

 

[Merc1]

^ bingo!


M