Five years after establishing a strategic cooperation, Daimler AG, Mercedes-Benz’s parent company, and the Renault-Nissan Alliance have announced a joint effort to build a new manufacturing facility in Aguascalientes, in central Mexico.

The new collaborative effort, dubbed COMPAS (Cooperation Manufacturing Plant Aguascalientes) will be owned 50/50 between Daimler and Nissan, with the partnered companies investing $1 billion total toward its completion and operation.

The new facility will be located close to Nissan’s Aguascalientes A2 plant, which was built over two decades ago, and will come with an initial annual production capacity of 230,000 units, creating an estimated 3,600 jobs by 2020. According to a press release, the plant may see increased capacity in the future if demand and market development warrant (previous reports indicated figures of up to 300,000 vehicles per year, with 5,700 employees).

The plant will see the first production of Infiniti vehicles in 2017, and Mercedes vehicles in 2018. The companies refrained from stating exactly which models will be built at the new plant, but previous reports indicate the next-gen Mercedes GLA compact SUV and new Infiniti models are on the docket.

Daimler and Nissan will also produce the next-gen premium compacts at other locations around the world, such as Europe and China.

It was announced in June of last year that Daimler and Nissan would work together to create the next-generation of premium compacts for both brands, cooperating closely at each stage of the development process.

Continue reading for the full story.

Why it matters

The collaboration between Daimler and the Renault-Nissan Alliance began in April of 2010 with three “pillar projects,” including a platform for the next-gen Smart car from Daimler. Since then, the collaboration has grown to 12 projects spanning Europe, the Americas and Japan.

This new production facility illustrates an emerging industry trend of mergers and consolidations, to maximize resources, optimize costs and minimize development overlap. The trend is seen not only between companies, but within individual automakers as well, with flexible vehicle architectures and modular platforms used for a variety of models.

This new production facility illustrates an emerging industry trend of mergers and consolidations, to maximize resources, optimize costs and minimize development overlap.

However, this latest cooperation between Daimler and the Renault-Nissan Alliance is unique in that the two companies will utilize the same factory to build their cars, as opposed to merely sharing technologies, platforms or vehicle components.

So how exactly will two separate companies run the facility without a direct merger? Taking the lead will be an international management team consisting of top brass from both Daimler and Nissan, with the decision-making process supported by a Board of Directors made up of three executives each from Nissan and Mercedes.

“With COMPAS, Mercedes-Benz Cars will for the first time have a production location for compact cars in the NAFTA region and will thus be able to serve its customers close to the market in a flexible and efficient manner,” said COMPAS CFO Uwe Jarosch.

In a globalized economy, efficiency means cutting out waste every step of the way. If Mercedes and Nissan can create products and get them to customers without crossing an ocean, everyone benefits.

This new plant also indicates big things to come from Nissan and Mercedes in terms of future compact offerings to the U.S. market. Expect a glut of new models from both makes in the next 5 years.

Press Release

Five years after their strategic cooperation was established, Daimler and the Renault-Nissan Alliance have significantly expanded their collaboration with the start of a manufacturing joint venture in Aguascalientes in central Mexico.

The new business entity COMPAS (Cooperation Manufacturing Plant Aguascalientes) is 50:50 owned by Daimler and Nissan. The partners will invest a total of US$1 billion in COMPAS which will oversee the construction and operation of a manufacturing plant for the production of next-generation premium compact vehicles for the brands Mercedes-Benz and Infiniti.

The state-of-the-art plant will be located near the Nissan Aguascalientes A2 plant. It will have an initial annual production capacity of more than 230,000 vehicles and will create about 3,600 direct jobs by 2020. Depending on the market development and customer demand, there will be the potential to add additional capacity. Production of Infiniti vehicles will begin in 2017, first Mercedes-Benz vehicles will roll off the line in 2018.

COMPAS is led by an international management team from Daimler and Nissan: Ryoji Kurosawa is Chief Executive Officer (CEO); Uwe Jarosch is Chief Financial Officer (CFO) and Glaucio Leite is Chief Quality Officer (CQO).

The decision-making process of COMPAS is supported by a Board of Directors made up of three executives from each company. The board members from Daimler are: Michael Göbel, Head of Production Compact Cars, Mercedes-Benz Cars; Axel Harries, Head of Quality Management, Mercedes-Benz Cars; and Christian Schulz, Head of Controlling, Mercedes-Benz Cars Operations.The Nissan executives are: Armando Avila, Manufacturing VP, Nissan Mexico; Carlos Servin, Finance VP, Nissan North America; and Takehiro Terai, Total Customer Satisfaction VP, Nissan North America.

“COMPAS is an outstanding example of the global reach of the Renault-Nissan Alliance and Daimler cooperation. Together we are combining the manufacturing expertise of Nissan and Daimler in one production plant in Mexico for the production of next-generation premium compact cars,” said COMPAS CEO Kurosawa. “Aguascalientes was selected as the location for this new plant thanks to the state’s well-established supplier base and Nissan’s track record in highly efficient manufacturing in Mexico for more than three decades,” he added.

Kurosawa has more than 30 years’ manufacturing experience at both Nissan and Infiniti. In his last position as General Manager of the Tochigi Plant in Japan, he was in charge of the production and quality of Infiniti, including the Infiniti Q50 flagship sedan.

“With COMPAS, Mercedes-Benz Cars will for the first time have a production location for compact cars in the NAFTA region and will thus be able to serve its customers close to the market in a flexible and efficient manner,” said COMPAS CFO Jarosch.
During more than 40 years at Daimler, Jarosch has completed various and largely international assignments in finance and controlling. In his last position as CFO of the Mercedes-Benz passenger cars business in India, he had a responsible role in the significant expansion of the local production and the sales network in the country.
“By incorporating the best from both companies in terms of manufacturing and quality processes, we will produce top-quality products, maximize resources, and optimize costs at the same time. We are also making sure that both brands’ quality requirements and identities are safeguarded,“ added COMPAS CQO Leite.

During 24 years at Daimler, Leite has taken over various functions in production and planning at Mercedes-Benz commercial vehicles as well as passenger cars in Brazil and Germany. In his last position, after several project assignments at the passenger car plants in the USA and China, he oversaw preparations for the final assembly of the next-generation E-Class at the Mercedes-Benz Sindelfingen plant in Germany.
As announced in June 2014, Daimler and Infiniti will also cooperate in the development of the next-generation premium compact vehicles for the brands Mercedes-Benz and Infiniti. The two partners will closely collaborate at every stage of the product creation process. Brand identity will be safeguarded as the Mercedes-Benz and Infiniti vehicles will clearly differ from each other in terms of product design, driving characteristics, and specifications.

Daimler and Nissan will also produce the next-generation premium compact cars at other production locations around the world, including Europe and China.

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