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The Truth behind the Renault-Nissan-Daimler Alliance

By Motortrend India Staff   |   06 April,2010

Putting an end to all speculation, the Franco-Japanese automobile alliance Renault-Nissan and the German automobile major Daimler AG will, today in Brussels, announce their plans of collaboration.

Representatives of the three automobile companies will address a joint press conference. In spite of denial from the companies, talks about equity swap between Renault and Daimler were on for quite some time.

Renault-Nissan chief executive Carlos Ghosn on his recent visit to India termed the media reports about the equity swap between Renault and Daimler as rumours. He said, "This industry is about scale, technology and competitiveness. We are talking with many potential partners and companies. The share swap with Daimler has not been decided".

He said equity swaps happen between two equals or with players strong in a particular region. He added that equity swaps are done largely as a matter of leverage and a display of loyalty towards the partnership.

In India, the Renault-Nissan alliance has a car plant near Chennai that is capable of manufacturing 2,00,000 units a year. Renault also has a joint venture with Mahindra and Mahindra (M&M) for making the Logan while the Japanese Nissan Motor Company has been busy making light commercial vehicles with Ashok Leyland.

Renault-Nissan has tied up with Bajaj Auto Ltd to design and develop an ultra low-cost car. In addition to this, the Franco-Nissan alliance is also in talks with Ashok Leyland for rolling out a small car. The German luxury car maker Daimler has its car plant in Pune and is building its truck plant near Chennai.

It is expected that Renault-Nissan-Daimler will have small stakes in each other so as to combine their forces in producing cars.

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