PARIS, Apr6 – French carmaker Renault was expected on Tuesday to approve a new partnership with Germany\’s Daimler to exchange capital and to share know-how in building smaller cars.
France\’s number two carmaker convened a meeting of its board of directors in Paris to "decide on a new partnership with Daimler", French Industry Minister Christian Estrosi told a news conference.
According to reports, Renault and Daimler, the manufacturer of the luxury Mercedes-Benz, have reached a deal to take three percent stakes in each other and work together to develop small cars and engines.
Japanese automaker Nissan, which is 44.3 percent owned by Renault, will also reportedly take part in the new tie-up and a formal announcement was expected on Wednesday.
A Renault spokesman refused to confirm the plan.
The global auto sector is struggling to overcome a slump caused by the economic downturn and is joining forces to share technology and reduce costs.
German industry experts think that, by cooperating with Renault, Daimler could make savings of 600 million euros (800 million dollars) in its development sector.
Advertisement. Scroll to continue reading.
Estrosi said a senior official from the economy ministry, Luc Rousseau, was attending the meeting. The French state has a 15-percent stake in Renault.
\’\’I can confirm that we approve of this partnership and that our representative will defend the state\’s industrial strategy," said Estrosi.
Renault shares were up 3.07 percent at 36.59 euros in early trading Tuesday in Paris on news of the partnership with Daimler.
The deal would be a "win-win situation" for the two firms, said Philippe Barrier from Societe Generale Cross Asset Research.
It would allow Daimler to buy technology at good prices while Renault and Nissan could share the cost of research and development for bigger models with the German partner, said Barrier in a research note.
The agreement provides for exchanges of engines and technology, sharing car parts and production platforms for future Smart models, and developing electric cars, said Guillaume Angue, analyst with CM-CIC Securities.
Despite poor sales for its Smart brand of minicars, Daimler envisions a turnaround by sharing parts with automakers that have strength in small vehicles, Japan\’s Nikkei business daily reported.
Renault and Nissan are developing an extensive line of zero-emission electric vehicles, including Nissan\’s Leaf, while Daimler could contribute its robust diesel engines for luxury cars and trucks.
Renault, maker of the popular Clio mini-car, entered into an alliance with Nissan 11 years ago to share car parts and open up access to production sites worldwide.
Advertisement. Scroll to continue reading.
Nissan for instance builds Renault Sandero hatchbacks at its plant in South Africa while Renault builds Nissan models in Brazil. The two carmakers have built a joint plant in India.
Renault, Nissan and Daimler had combined sales of 7.22 million vehicles in 2009, trailing the 8.6 million units for the alliance between Volkswagen and Japan\’s Suzuki and the 7.81 million vehicles sold by Toyota.
Volkswagen, the biggest European car maker, and Suzuki finalised a cross-shareholding operation last year.
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.