Daimler and Renault are discussing acquiring mutual equity stakes

Article by Christian A., on August 29, 2010

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.

Meanwhile, Mercedes-Benz wants smaller cars beyond the A class and Daimler's Smart vehicles. Last December, Daimler and Renault admitted that there were talks about joint projects but no further details were provided.

There was speculation that the two firms could develop a joint small-car platform based on Renault's Twingo and would be used by Daimler to underpin a four-seater model for its Smart microcar brand.

According to the Financial Times, Daimler "urgently needed" a partner to produce small cars. This is said to be an area where the German group needs help to gain profit due to the small scale and high variable costs. Another segment that these carmakers are considering working on together is the production of light trucks.

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