Ghosn Sees Slower Growth in Renault-Nissan’s Daimler Partnership

The Renault-Nissan alliance and Daimler AG, which cooperate on the German company’s Smart city cars and planned Mercedes-Benz pickup truck, see limited scope for adding to their partnership as most obvious projects are already under way.

“When you start working together, most of the low-hanging fruit comes easily and very fast,” Carlos Ghosn, chief executive officer of both Renault and Nissan, said Friday at a press conference with Daimler CEO Dieter Zetsche at the Paris Motor Show. “From now on maybe the number of additional projects may take a longer time. It’s the law of physics.”

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Carmakers have increasingly joined forces to share the high costs of developing electrically powered, shared and autonomous vehicles. Daimler, French counterpart Renault SA and its Japanese partner Nissan Motor Co. agreed in 2010 to create and build some vehicles together, including electric versions of Smart’s line-up being displayed in Paris.

The industry’s focus for cooperation is shifting to more high-tech areas from manufacturing as established companies fight new entrants such as Tesla Motors Inc. Daimler’s Mercedes-Benz luxury brand, its main division, introduced the planned EQ all-electric line at the show on Thursday.

Daimler, Renault and Nissan acquired 3.1 percent stakes in each other when they started cooperating. The German company shifted the holdings into its pension fund in mid-2016 to plug a deficit. There’s no need for the partners to add to the stakes, Ghosn said Friday.

Tie-Up Question

That may signal that the carmakers’ tie-up is weakening, said Stuart Pearson, an analyst at Exane BNP Paribas.

“It looks more likely that they will drift apart rather than get closer” following Daimler’s shift of its partners’ holdings, Pearson said. “There is no strategic drive behind that stake anymore.”

Zetsche said he and Ghosn are discussing ways to expand their cooperation on electric vehicles, but haven’t made any decisions on new projects. Renault already supplies electric engines for the Smart that are also used in the French manufacturer’s battery-powered Zoe.

“We started this collaboration based on three projects where we saw benefits for both partners, and now we have 13 or 14 or 15 projects already producing a lot of benefits,” Zetsche said. “That’s a strong foundation for our partnership. If it stays at that number that’s perfect, or if it expands that’s fine too. ”

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