June 27, 2014 at 4:58 pm

Mercedes teams with Infiniti on $1.4B car plant in Mexico

Daimler AG and Nissan Motor Co. will jointly produce luxury vehicles at a new $1.4 billion factory in Mexico, the biggest project to date in their 4-year-old partnership.

The German and Japanese automakers will assemble as many as 300,000 Mercedes-Benz and Infiniti compact cars at a facility near Nissan’s plant in Aguascalientes, the companies said Friday in a joint statement. The first cars are due to roll off the line in 2017.

“This project shows how our collaboration, which began in Europe, has become global in scope,” Carlos Ghosn, chief executive officer of Nissan and its French affiliate Renault SA, said in the statement.

Daimler has cooperated with the Renault-Nissan Alliance since 2010. The partnership, which was initially focused on city cars and delivery vans, has since expanded to include motors and transmissions. The latest step would help Infiniti expand its lineup and lower costs for Mercedes as the Stuttgart-based carmaker seeks to surpass BMW in sales and profit by the end of the decade.

Daimler and Nissan will establish a 50/50 joint venture to manage the construction and operation of the Mexican factory, which will eventually employ almost 5,700 people. Production of Infiniti models is slated to start in 2017, with Mercedes cars to follow a year later. The companies expect to reach full capacity at the site in 2021.

The two upscale brands will cooperate to ensure their respective vehicles differ from one another, they said.