Report: Nissan Drops Luxury Car Project with Daimler

Nissan Motor Co. has halted co-development of a small luxury car with Daimler AG, according to the Japanese business daily Nikkan Kogyo.

Nissan won’t confirm the report, which is similar to one from Reuters in January. The carmaker does say it remains committed to the broader, manufacturing and product development partnership launched in 2010 between Daimler and the Renault-Nissan alliance.

Nissan opted to step away from the project because of the sharp shift in consumer preferences in North America from cars to trucks and SUV/crossovers, according to the Nikkan Kogyo. Daimler CEO Dieter Zetsche said in February that “question marks” had arisen about the cost of the project and its “MFA2” platform.

The car was to be produced in Aguascalientes, Mexico, by a 50:50 joint venture between the two companies. That $1 billion facility began making Nissan’s Infiniti QX50 crossover vehicle, which rides on a platform the partners developed, in December.

The companies also co-produce engines at a Nissan factory in Decherd, Tenn., and they are jointly developing a luxury pickup truck for Daimler’s Mercedes-Benz unit.