Report: Nissan Drops Out of Luxury Car Project with Mercedes

Nissan Motor Co. is abandoning plans to develop luxury vehicles jointly with Daimler AG’s Mercedes-Benz unit, sources tell Reuters.

They say Nissan decided in October not to use the advanced “MFA2” platform the two companies have been developing because Infiniti isn’t generating enough cash to fund its portion of the project. The MFA2 platform is a modified version of the MFA chassis that carries Mercedes A-Class minicars.

Reuters says Nissan’s decision threatens the long-term viability of the factory it is scheduled to open with Daimler in Aguascalientes, Mexico, later this year. The $1 billion facility will have initial capacity to make more than 230,000 vehicles per year.

The first cars to be produced there were to be the Mercedes GLA and Infiniti QX30. Both small crossovers ride on Daimler’s MFA chassis. Nissan already produces the QX30 on the MFA platform at its factory in Sunderland, England.

When the partners announced the Aguascalientes factory, they said the plant would expand capacity to 300,000 units by 2021 as the companies added more models. Nissan indicated at the time it planned to build four types of vehicles there, two of them to launch in 2020.

Nissan has now cancelled plans to employ the MFA2 platform in any Infiniti models, including successors to the QX30, according to Reuters. It says Nissan will begin building the larger QX50 crossover at Aguascalientes later this year.