Nissan, Daimler plan joint plant in Mexico image

Nissan Motor Co Ltd and Daimler AG are holding advanced talks to build a joint plant in Mexico, according to the Nikkei business daily newspaper. The new facility would assemble passenger vehicles for sale mainly in North America.

Production capacity is said to reach 200,000 vehicles a year and the plant is expected to begin operating in the first half of 2014, after a total investment of $1 billion. The association comes as no surprise given the strategic alliance between Renault Nissan and Daimler announced in April 2010. According to the plan, both groups agreed to jointly develop cars and engines.

The new factory in Mexico will make vehicles for both car brands. The cooperation could materialize with Nissan building the plant and Daimler taking a capital stake in the operationg company, the Nikkei said. The plant will initially build Nissan models that are currently made in Japan and will later expand to luxury vehicles. For Daimler it will be the first time it builds passenger cars in Mexico, as the company’s current operations in the country focus only on large commercial vehicles. Details about the joint venture’s structure and ownership will be revealed later this year, when the site of the plant will also be announced.

Although both companies declined to comment on this subject, Nissan previously said it was studying opportunities in Mexico after a state government in the country announced the carmaker was considering an investment of $2 billion in a new plant there. Also, Nissan said in September it would build its next Infiniti models outside of Japan because of disadvantages brought by the strong yen.