Daimler, Nissan partner up on Mexico vehicle production strategy

Infiniti and Mercedes compact cars will reportedly move between manufacturing facilities held by Renault-Nissan and Daimler in Mexico, now that the two parties have signed a new agreement.

The plan involves the use of Daimler's front-wheel drive designs and the assembly of the vehicles at Nissan's location, though specifics on the agreement were to be released in an upcoming joint press conference. Dieter Zetsche, Daimler CEO, and Carlos Ghos, Renault Nissan CEO, are expected to attend the conference.

This latest deal, to be officially announced on June 27, has been described by Daimler as the biggest venture into worldwide collaboration ever attempted by Daimler and Renault-Nissan.

The newly announced deal between Daimler and Renault-Nissan wasn't the first time the companies have formed an alliance with one another. Mercedes and Nissan have worked with Renault since 2010.

The three companies have reportedly shared in vehicle architecture, engine designs and operating facilities for compact cars and vans since Ghos and Zetsche first came to terms in 2010.

Mercedes gains a North American site where it can construct its modular front architecture, which saves the company on development and deployment of its products. Infiniti gains entries into the lower end of its range, which include new SUVs and compact cars.

While Daimler hasn't revealed which model of Mercedes it will build in Mexico, sources claim the automaker was planning to construct new CLA and A-class sedans 300 miles north of Mexico City at the Aguascalientes factory.

The number of automakers setting up operations in Mexico has continually risen.

Known as the Maquiladora region, Mexico's free-trade zones have long served as fertile soil for manufacturing operations hoping to move goods quickly into the U.S. and looking to do so with the assistance of a low-cost workforce. Along with Infiniti and Mercedes, BMW and Audi were also said to be closing in on developing their own facilities in Mexico.

BMW was expected to make a decision on whether it would build a new plant in Mexico or invest $1 billion in an existing site in Spartanburg, S.C. The move to bolster the Spartanburg plant or build a new on Mexico was said to come in response to high demand for the cars in the United States, accounting for 19 percent of deliveries around the globe.

Audi has already started construction on a $1.3 billion assembly plant, just southeast of Mexico City, which has been expected to produce up to 150,000 automobiles each year. Audi has hinted the capacity could double down the road.