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Daimler To Build Plant in Mexico

Karla Salinas | 25.06.2014

Germany's Daimler AG will build a Mercedes production plant in Mexico at a facility operated by its alliance partner Nissan Motor Co., Germany's Manager magazine reported Sunday.

Germany's Daimler AG will build a Mercedes production plant in Mexico at a facility operated by its alliance partner Nissan Motor Co., Germany's Manager magazine reported Sunday.

Daimler's executive board is expected to approve the project within the next two weeks, the article said.

A spokesman for Daimler declined to comment on the article.

In March, Nissan and Daimler started preparing the ground for a joint manufacturing venture in Mexico that could produce small, upmarket cars for their respective Infiniti and Mercedes-Benz brands.

The planned partnership is another example of how car makers are teaming up to share development and manufacturing costs and spread them over larger volumes to achieve economies of scale.

The two companies have already set out a legal framework for a 50-50 joint venture that would ease Daimler's manufacturing capacity constraint in North America and allow the two partners to benefit from Mexico's low labor costs to export into the U.S. profitably.

Nissan has a long history in Mexico, where it has two assembly plants at Aguascalientes making Versa Note and Sentra models, which are exported into the U.S.

Source: The Wall Street Journal

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