As part of the talks between Daimler and Renault over a possible cooperation, there have been discussions about mutual equity stakes, the Financial Times reported.

Two sources have told the newspaper that the alliance could go beyond working on small cars. The paper said the stakes would probably be below 10% in each other. The two companies have made no attempts to cover up the possibility that they could cooperate to cut costs, pool technology resources and build scale during this difficult economic period. Renault-Nissan still does not have top of the line cars, despite attempts with the Safrane, Vel Satis or Korean-built Samsung models. Continued after the jump!

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Daimler completed the sale of a 5.34% stake in India’s Tata Motors for about 300 million euros ($408 million). But instead of rising, the stock prices of these two firms actually slightly dropped.

No reasons were given for the sale but several factors have been pointed out. With Tata’s acquisition of the Jaguar Land Rover group, Tata becomes a competitor to Daimler’s Mercedes-Benz brand worldwide. Meanwhile, Daimler Trucks is working to create its own operations in India to make commercial vehicles that rival Tata’s heavy commercial vehicles. Unlike the rest of the globe, the Indian market is flourishing. Daimler realizes the extensive opportunity for growth in this country and making its moves would only create a tension in its partnership with Tata. The 25.6 million shares sold saw an average transaction price that was discounted 5.8% from market value. Since 1954, Daimler and Tata have been partners in the Indian market with Tata producing licensed copies of Daimler vehicles. While the partnership hasn’t been exactly smooth, the two firms say that they remain to be solid allies despite the latest development.

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In hopes of raising up to $429 million worth of shares, Daimler AG is offering its entire stake in India’s Tata Motors Ltd., according to insiders. Tata Motors produces the world’s cheapest car, the Nano, and also owns UK-based luxury brands Jaguar and Land Rover.

Daimler is reportedly selling 25.6 million shares at 737.4 rupees ($16.2) to 761.3 rupees each, which is 4% to 7% below the stock’s Monday close of 796.75 rupees. The ordinary shares stand for a 5.34% stake in the firm. Daimler also owns 4.71% of Tata Motors on a fully diluted basis. Early speculations in India indicated that Daimler intends to exit its long-held stake in Tata Motors. Citigroup is managing the share sale in Tata Motors. Shares in Tata Motors have increased by 19% since Feb. 26, the date that the company posted a consolidated net profit for the second straight quarter as sales from its Jaguar and Land Rover unit recovered. Neither Daimler nor Tata Motors have commented on this matter.

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This marks the first time in 14 years that Daimler AG scrapped its dividend. The move was deemed to be necessary after the company posted a worse-than-expected 2009 net loss, bringing shares down to their lowest level in five months.

CEO Dieter Zetsche regards this move to be an “exception.” He said that Daimler would distribute a payout for 2010, when it forecasts more than 2.3 billion euros ($3.12 billion) in operating profit due mainly to an a 2 billion euro rebound in earnings it expects from its Mercedes-Benz Cars division. “Brave but appropriate” is how Morgan Stanley describes the payout omission but it cautioned that the market would cut its estimates for 2010 after expecting a higher operating profit estimate. A Reuters poll stated that the average forecast is for almost 3 billion in 2010 earnings before interest and taxes (EBIT). In a note to clients, the bank’s analysts said that even when most auto stocks refused to give a 2010 profit outlook, Daimler had the boldness to provide an outlook that is not as high as consensus expects. This resulted to the consensus falling more for Daimler than for other companies.

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A three-year extension to CEO Dieter Zetsche’s contract was approved by Daimler AG’s supervisory board, according to a source who spoke with Reuters.

There have been plenty of speculation about the future of Zetsche but company insiders say that there never was any question about his standing and that in fact, his contract will be extended beyond 2013. A Daimler spokesman declined to comment but then it’s to be expected since the company has a policy of not giving out statements about boardroom matters or personnel issues. In May 2013, Zetsche will turn 60. Continued after the jump!

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Spokesmen of Daimler AG and BMW AG have stated that talks on a possible cooperation between them are ongoing. There had been speculations that the talks have ended without success.

In particular, Der Spiegel magazine said talks to expand cooperation beyond hybrid powertains and purchasing to engines and transmissions have been broken off. A high-level manager was quoted to have said that there are “no new topics and no new meetings.” Der Spiegel reported that many meetings have transpired between Daimler CEO Dieter Zetsche and BMW’s Norbert Reithofer in the past year but nothing substantial came out of it. Continued after the jump!

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By the middle of the year, discussions between Daimler AG CEO Dieter Zetsche and French automaker Renault SA are expected to be completed. However, Zetsche declined to say if the talks are related to cooperation on future Smart cars.

He said that creating the next-generation two-seat minicar and a second vehicle for Smart is dependent on finding a partner. What Smart needs, according to Zetsche, are higher volume and a better cost base. The lineup also has to expand beyond one model. Zetsche believes that the decision on Smart will be made in the second half of the year. Continued after the jump!

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Daimler AG is negotiating with Renault SA and other potential partners to enter a compact car cooperation by mid-2010, chief executive Dieter Zetsche told German daily Handelsblatt. Zetsche said that it’s also possible that it could “go faster than that.”

Reports have been spreading that Daimler is in talks with Renault on a small car platform. Earlier this month, Renault had named Daimler as a potential partner. Daimler wants a partner to help it expand the Smart city-car brand as well as to jointly develop engines for its Mercedes-Benz B Class and other compact models. On the other hand, Renault seeks to collaborate with a partner for a future range of low-cost city cars. The car industry’s worst downturn in decades has resulted to carmakers around the world seeking to cooperate with rivals to share the cost of developing new technologies.

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To cope in this crisis, Renault SA has engaged in talks with Daimler AG and other companies about partnerships, according to its Chief Operating Officer, Patrick Pelata. Last Thursday, Pelata confirmed a statement made by Daimler CEO Dieter Zetsche that his company is talking with Renault and other automakers about joint projects.

Daimler is looking for a partner to help it expand the Smart city-car brand and to jointly develop engines for its Mercedes-Benz B-Class and other compact models. Pelata divulged that the discussions cover areas of cooperation that include engines, transmissions and platforms. Continued after the jump!

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Daimler AG staff rejoices as it has been confirmed that each member will get 1,900 euros plus interest with their December pay slips. After the company threw away plans to switch to stock awards as a method to conserve liquidity, it estimated that it will get about 280 million euros ($417.4 million) in profit-sharing payments in cash. Last Tuesday, Daimler revealed that the change was made after consulting with the works council because tax issues made the proposed system unappealing.

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