Nissan halts luxury car development with Daimler, report says

TOKYO – Nissan says it is still committed to cooperating with Daimler following a report it has suspended joint development of a luxury compact car amid an uncertain U.S. market outlook.

The Japanese automaker’s Infiniti premium brand decided to halt development of the vehicle because of the dramatic shift in U.S. demand away from passenger cars and toward light trucks, according to a July 6 report in Japan’s Nikkan Kogyo business daily.

Nissan Motor Co. was also concerned about uncertainties in the outlook for tariffs, the newspaper said.

The vehicle would have been built at a plant in Aguascalientes, Mexico, leaving it vulnerable to possible duty impact as the U.S. government seeks to renegotiate NAFTA, the report said.

That plant, a 50-50 venture between Daimler AG and the Renault-Nissan-Mitsubishi Alliance, was completed in 2017 and has annual capacity for 230,000 vehicles.

Last December, the factory began making the Infiniti QX50 crossover, based on a platform jointly developed with Daimler.

Nissan spokesman Shiro Nagai declined to comment on the report, saying the company can’t discuss future product plans. But he said Nissan and the alliance remain committed to the broad-ranging partnership in place with the German parent company of Mercedes-Benz.

Added Infiniti spokesman Trevor Hale: "The cooperation between the Renault-Nissan-Mitsubishi Alliance and Daimler is solid and we continue to reap the benefits of our successful cooperation, which includes a number of R&D and manufacturing initiatives around the world.”

Nissan has a 1.55 percent stake in Daimler, which, in turn, holds 3.1 percent of Nissan. Renault owns 1.55 percent of Daimler, and the German carmaker has a reciprocal 3.1 percent share.

Among other projects, Nissan and Daimler jointly produce engines at Nissan’s plant in Decherd, Tenn. The two also have agreed to jointly develop a pickup for Mercedes-Benz.