Renault-Nissan and Mercedes on a mission to Mexico

Renault-Nissan and Mercedes have agreed a joint USD$1-billion investment to open a new shared factory in Mexico. It will be Mercedes' second major production plant on the North American continent, after its existing facility in Alabama. The factor will be located in Aguascalientes, around 500km from Mexico City at a location where Nissan already has its own production facility. With a totoal annual capacity of 300,000 units initially, the plant will at first build a new compact model for Infiniti, Nissan's luxury brand, before adding a new Mercedes model (most likely a variant of the A-Class) in 2018. It's thought that the A-Class' front-wheel-drive chassis will form the basis for most of the Infiniti models to be built at the plant, but it's also likely to see production of larger, rear-drive models as well.

The plan is for both companies to benefit from both the tax advantages that come from building cars in Mexico for sale in the US market (rather than importing them from Europe or Japan) as well as the obvious labour cost advantages of the location. Around 5,700 jobs will be created in the area to begin with.

It's part of a major ramp-up of co-operation between Renault, Nissan, Infiniti and Mercedes across the board. Production will soon start in Sunderland of the new Infiniti Q30 crossover, which is a platform share with the Mercedes GLA, while Smart will be unveiling its new ForFour hatchback in the next few weeks, which shares all its underpinnings with the new Renault Twingo.