Daimler may build Mercedes cars with Renault

 German carmaker Daimler is considering making passenger cars for its core Mercedes brand with partners Renault and Nissan, German paper Financial Times Deutschland reported, without saying where it got the information.

The first cars might be constructed jointly from 2016 inEastern Europeand could include a small Mercedes off-road vehicle, and cars for Nissan’s premium brand Infiniti, the paper said, adding a decision might be taken at the end of 2012.

For Daimler, joint production with Nissan is designed to narrow the gap with luxury-market leader BMW and Volkswagen’s Audi whose second-quarter operating margins of 11.6 per cent and 11.5 per cent respectively far exceeded the 8.6 per cent at Mercedes.

“Mercedes is lagging its key rivals and has been under strong pressure for about a year to post better results,” said Frankfurt-based Metzler Bank analyst Juergen Pieper. “They’re trying hard to shake off their loser image.”

Spokesmen for Daimler and Renault declined to comment. The shares at Stuttgart-based Daimler rose 0.4 per cent, or 18 cents, to €41.89 as of 1016 GMT.

Under intense pressure to shave costs, automakers have sought to develop or expand alliances that give them access to car segments not yet in their portfolio or to new markets.

General Motors Co and PSA Peugeot Citroen announced a global alliance in February with theU.S.automaker taking a 7 per cent stake in Peugeot as part of a deal that includes pooled purchasing and research and development.

GM is banking on the partnership to help it reverse 12 years of losses inEuropewhile Peugeot hopes to boost sales outside its core European market.