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Nissan, Daimler to Make Mercedes Engines in U.S. in 2014

The Nissan Plant in Decherd, Tennessee
The Nissan Motor Co. plant in Decherd, Tennessee. Photographer: Harrison McClary/Bloomberg

Jan. 8 (Bloomberg) -- Nissan Motor Co. and Daimler AG will build four-cylinder Mercedes-Benz engines beginning in 2014 at a Nissan plant in Tennessee, the first Mercedes engines made in North America.

The engines will be used in Mercedes and Infiniti models, the companies said in an e-mailed statement. The engines for Mercedes will be used in C-Class models being built at Daimler’s factory near Tuscaloosa, Alabama.

Nissan-Renault and Daimler first announced plans in April 2010 to share development costs, engines and small-car technologies to take on Volkswagen AG and Toyota Motor Corp. The latest project will bring Daimler’s Mercedes and Smart brands closer to Renault’s small cars and Nissan’s Infiniti range.

“We have a clear understanding that these are independent companies outside of the alliance,” Daimler Chief Executive Officer Dieter Zetsche said at a media event in Detroit. “We have no intention of a further capital linkage. We share the office and not the bedroom, and that works perfectly well.”

Nissan-Renault isn’t “commenting on the scope of the expansion,” or whether additional workers will be hired, said Rachel Konrad, a spokeswoman.

The plant in Decherd, Tennessee, which is about 67 miles (108 kilometers) northwest of Chattanooga, began production in 1997. It builds 4-, 6- and 8-cylinder engines for U.S.- manufactured Nissan and Infiniti vehicles, Nissan said. Last year, more than 580,000 engines were made at Decherd, the company said.

The Nissan-Daimler engine venture is expected to produce 250,000 engines annually once full output is reached, the companies said.

To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net

To contact the editor responsible for this story: Sylvia Wier at swier@bloomberg.net

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