Tennessee Plant to Produce Engines for Nissan, Daimler

Nissan N.A. powertrain plant is the latest site for their manufacturing collaborative

Nissan North America’s powertrain plant at Decherd, TN, will begin manufacturing four-cylinder aluminum engines for Mercedes Benz and Infiniti models. No specific investment or value was announced, but the Tennessee operation will begin supplying engines for the Mercedes-Benz C-Class sedans to Mercedes’ assembly plant in Tuscaloosa, AL, by 2014. The announcement by the Renault-Nissan Alliance and Daimler AG was called “the latest step forward” in their nearly two-year-old collaborative program, and their first in the NAFTA region.

"This is the newest milestone in our pragmatic collaboration and our most significant project outside of Europe so far," stated Renault-Nissan CEO Carlos Ghosn. "Localized capacity reduces exposure to foreign exchange rates while rapidly enabling a good business development in North America - a win-win for the Alliance and Daimler."

The C-Class vehicles are the only models identified as downstream products for the new engine production. Nissan assembles light trucks and sedans at Canton, MS, and small and midsized cars, pickups, and SUVs at Smyrna, TN.

The Decherd powertrain plant casts aluminum engine blocks and forges steel crankshafts, and produces a range of engines for Nissan and Infiniti models.

The initial capacity for the Nissan/Daimler engine series is 250,000 units/year, according to the partnership. In 2010 the Decherd plant produced over 580,000 engines in four-, six-, and eight-cylinder configurations. Last summer Nissan announced an expansion project for a new assembly line to produce up to 150,000 electric motors annually for the Nissan LEAF, which is being built at the assembly plant in Smyrna.

"In the context of our Mercedes-Benz 2020 growth strategy, we have decided that we will expand the production capacities required for this close to the customers,” stated Daimler chairman Dr. Dieter Zetsche. “Through the strategic extension of our cooperation with Renault-Nissan we can realize near-market engine production in the NAFTA region on attractive economic terms and make optimum use of synergies arising from the cooperation. Thus we are systematically broadening our manufacturing footprint in this important growth market."

Daimler and Renault-Nissan formed their alliance in April 2010 by exchanging 3.1% equity shares. Since then, they have: agreed to share production of “city car” underbodies (Mercedes Smart, Renault Twingo); planned to build a new “city van”; and shared technology for three-cylinder engines for city cars and four-cylinder diesel engines for a new light commercial vehicle and premium compact cars. There also are plans for Daimler to produce four- and six-cylinder gas engines and automatic transmissions for installation in Nissan and Infiniti models.

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