The European car industry is set to consolidate further with the news that Daimler and Renault are to co-operate on platform and drivetrain sharing, with Mercedes, Nissan, Smart and Renault working together on new models.
The aim is to save what a Daimler insider described to Autocar as billions of euros in annual savings for both sides.
Similar talks Daimler between BMW broke down last year due to differences in engineering philosophy on small cars and engines. BMW will now seek closer working ties with PSA.
We have talked to just about everyone in recent years but over time it became apparent that Renault provided the best fit both in terms of operations and business culture, said a Daimler source familiar with the talks.
At the heart of the co-operation is Project Edison - a new small car initiative based on a platform which will underpin the next Smart ForTwo and, a successor to the Smart ForFour. This model will use a rear-engine/rear-wheel drive layout, and todays Tridion safety cell, both of which are considered unique selling points for the Smart brand.
Renault will use the new platform as the basis for the production version of the electric Twizy and the next Twingo, to be built alongside the Smart at Renaults Slovenian plant.
The second major component of the deal will be drivetrain sharing. Project Edison will include an electric powertrain based on the Smart ED, and there will be a range of new four-cylinder petrol and diesels to be uses in Mercedes, Smarts, Renaults and Nissans.
Ranging from 1.2 to 1.8 litres, the engines will be engineered by Daimler and built by Renault. They will be used in cars such as the next A and B-class, as well as forthcoming Clios and Meganes.
Although not part of the initial co-operation, Daimler sources reveal Renaults Ghosn is also investigating using Mercedes-Benzs new front- and four-wheel drive MFA (modular front antrieb) platform set to underpin the new A- and B-class for a proposed entry level Infiniti model.
Also under discussion is a possible further expansion of the co-operation agreement that would see Daimler supply Renault with V6 and V8 petrol and diesel engines as well as a new automatic transmission to replace todays seven-speed 7G-Tronic unit for use in future Infiniti models.
[autocar]