DETROIT (Reuters) - Nissan Motor Co (7201.T) and Daimler AG (DAIGn.DE) said on Sunday they would produce Mercedes-Benz gasoline engines at Nissan’s Tennessee factory from 2014 to be fitted on Mercedes and Infiniti models.
Production capacity of the four-cylinder engines will reach 250,000 a year at full ramp-up, the companies said.
The project is the latest between Daimler and the alliance of Nissan and Renault SA (RENA.PA), which are exploring ways to share vehicle, engine and other technologies to save development costs and respond faster to market needs.
It also marks the first production of Mercedes-Benz engines in North America, where the German automaker is looking to build a stronger manufacturing footprint. The engines will power the luxury brand’s C-Class cars built at Daimler’s Alabama plant.
Nissan’s Decherd, Tennessee plant makes four, six and eight-cylinder engines for U.S.-produced Nissan and Infiniti models, and built more than 580,000 engines last year.
Reporting by Laurence Frost and Chang-Ran Kim. Editing by Jane Merriman