Nissan and Mercedes Will Continue to Share Plant in Mexico

The Franco-Japanese alliance that is Renault-Nissan and Germany's Daimler has announced that they will expand their four-year partnership with a new plant located in Aguascalientes, Mexico.

The two partners share an estimated $1.4 billion in investment costs for a project set to start next year.

The production of the Infiniti models is scheduled to begin in 2017. Mercedes Benz vehicles will start production the year following.

The plant will create some new 5,700 jobs.

The Aguascalientes plant represents the partners' biggest joint deal to date. In the deal, Infiniti, made by Nissan, will receive support in filling a gap at the bottom of its vehicle range with a new SUV, sedan and coupe. Those vehicles are expected to share parts with future Mercedes A-Class, B-Class, GLA, and CLA vehicles.

Daimler, the maker of Mercedes, will get the first North American production line for its MFA vehicle structure. They will also receive development savings.

"Just over four years after the cooperation was founded, the decision for the new plant in Mexico is a major milestone," said Dieter Zetsche.

"This is all about scale," Arndt Ellinghorst, an automotive analyst with ISI Group, told The Wall Street Journal. "It's about lowering costs by sharing the parts of the car that are less relevant to the consumer."

Analysts are claiming that the deal shows how much important Mexico is to car- makers. The country is growing in regards to production, perhaps as fast as southern U.S.

BMW is looking to open a plant in Mexico as well. It would be a move from their current base of operations in the southern U.S.

The cars produced at the plant at Aguascalientes are expected to be exported to the U.S. by 2017 from the car manufacturers Infiniti and Mercedes.