Daimler AG is one of a shrinking number of automakers that continues to build its own transmissions, but the parent of Mercedes-Benz is now looking to change that. The automaker has been holding talks with rival BMW about possible powertrain collaborations including transmissions. Mercedes already supplies the two-mode hybrid transmissions that BMW is installing in its forthcoming ActiveHybrid X6. However, a proposal to build a joint factory to produce automatic transmissions in the U.S. for the vehicles being built by both companies here has reportedly been scuttled.
Automotive News also reports that a second proposal to shift Daimler's European transmission operations to a new joint venture with BMW and ZF has also been abandoned. The two automakers had been discussing a jointly developed eight-speed automatic transmission but could not agree on technical details.
Mercedes is still looking for ways to offload its transmission operations, saying that it is not core to its business. This will be increasingly true if more of its vehicles switch to electrified powertrains where single speed reduction gears are all that is required. The two companies are still discussing collaborations on engines, however, including a new three-cylinder unit.
Chrysler and Daimler have been divorced for nearly three years, but the two automakers are still very much entwined when it comes to product. The Chrysler 300, Dodge Charger, and Dodge Challenger use a platform and several components sourced from Daimler. Chrysler's short-term product plans include more Daimler DNA in the the Mercedes-Benz M-Class architecture that forms the basis for the new Jeep Grand Cherokee and Dodge Durango underpinnings.
Unfortunately for the Pentastar, Daimler doesn't seem to want to play parts pimp for its former underling, as it is shorting the company of vital components required to continue operations. In August, Chrysler filed suit against Daimler because the German automaker was withholding parts like torque converters and steering columns. That suit has reportedly been settled, but now Chrysler alleges that the 2011 Jeep Grand Cherokee launch is now in jeopardy. As such, Chrysler has filed a second suit to force Daimler to provide rear axles and other components in a timely fashion, stating that the company needs the parts to build new Grand Cherokee models for testing in advance of the vehicle's May launch.
Reports of a collaboration between Daimler and Renault on a new four-door model to join the Fortwo in Smart dealerships just won't die, leading us to believe there may be a ring of truth behind the rumors. The last time Daimler set out to partner on a more mainstream Smart, the resulting ForFour – which was based on borrowed underpinnings from Mitsubishi – never met sales expectations and was canceled after a few short years on the market.
Collaborating with Renault on the development of a four-door Smart should help shield Daimler from the high cost of developing a model-specific platform that's unlikely to sell in particularly high volumes. Further, the rumored new model would offer Smart buyers a new option to compete with the new Toyota iQ, which seats up to four occupants despite its diminutive dimensions.
Easy come, easy go – that's apparently Chrysler's luck with repurposed European-market work trucks. For the last few years, Chrysler has offered the German-designed Sprinter van under the Dodge nameplate. Mercedes-Benz wants its rig back, so it's taking the well-regarded work vehicle out of Pentastar dealerships and anointing about 120 of its own dealerships as Sprinter outlets. Consider it more terms of Chrysler's divorce from its one-time masters.
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As much as Daimler has been hating on Chrysler lately, one would think that the Pentastar was the cold-hearted deviant who stuck a knife into the heart of the German automaker. The "Merger of Equals" turned out to be a bum deal for Chrysler, but at least it was able to procure some hardware from its German ex. Some parts of the LX platform that underpins the Dodge 300C, Charger and Challenger, and the platform that will underpin the next-generation Jeep Grand Cherokee and Durango all came from Mercedes-Benz, as does the excellent Sprinter van.
Though the Sprinter has been met with some level of success at select Dodge dealers, Mercedes has decided to pull the plug on Chrysler in 2010. About 350 dealers sell the Sprinter as a Dodge, and the large commercial van has managed sales of about 20,000 per year since it donned the Ram head in 2003. Mercedes is switching to 120 dealers branded Daimler Vans USA.
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When Daimler offloaded Chrysler onto Cerberus back in 2007, the well-heeled German automaker was likely ecstatic. Considering the fact that Daimler left Chrysler without much in the way of new product, the feeling was likely mutual. While the two automakers have parted ways, Chrysler still relies on its former parent for some vital parts and as Automotive News tells it, Chrysler says that Daimler suddenly isn't in the mood to give them up.
Chrysler is reportedly suing Daimler for withholding steering columns and torque converters, saying that the shortage of vital parts is threatening the production of the Chrysler 300, Dodge Challenger and Charger, as well as the launch of the next generation Jeep Grand Cherokee. Daimler told AN that Chrysler's claims were "without merit," and at the same time, the German automaker is demanding $78 million from Chrysler for engines the company never delivered. In the formal complaint, Chrysler spokesman Gualberto Ranieri says Daimler's demand for payment "is designed to extort a settlement by wrongfully withholding crucial parts that Daimler has contractually committed to supply to Chrysler Group."
Daimler says Chrysler owes the money since the Auburn Hills, MI based automaker didn't order as many 2.2-liter diesel engines, which are offered in European PT Cruisers, as it agreed to use. Chrysler counters that an April 17 agreement between the two automakers settled several disputes between the two companies, including the volume shortfall. The agreement between the two automakers was likely a preemptive move prior to Chrysler's bankruptcy filing on April 30. Call us crazy, but it looks like it may be a while before Daimler and Chrysler finally kiss and make up.
Luxury automobile sales have been hit especially hard during the global economic disaster, and Daimler and BMW may become much closer allies as a result. German magazine Der Spiegel published a report stating that the two luxury giants are working to combine their purchasing power to save hundreds of millions of dollars. But the really interesting cooperation will reportedly happen in the form of a stock swap.
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As a small step that could be considered a healthy vote of confidence in Iraq's return to stability, Mercedes has established a corporate representative office in Baghdad. Daimler set up shop in Erbil, Iraq last February, opening a training center that would get mechanics ready for coming Mercedes products. By installing a corporate representative, the company will have someone on the ground to figure out how best to introduce new Mercedes products to the country. The rep will focus on examining and developing the market for trucks and buses, which Daimler should have all to itself for a while.
Daimler is the latest in a long line of automakers to post a heavy decline for Q4 earnings in 2008. The German automaker was in the red to the tune of $1.95 billion, which is isn't a surprise considering October through December was among the worst periods for car sales in modern times. The loss was also a big swing from the $2.14 billion in profit Daimler posted in Q4 2007. Sales shrunk by 17% for the quarter as well, with net cash flow down by 12% to $26.9 billion. A big portion of Daimler's loss came courtesy of Chrysler, as the German automaker's 19.9% stake resulted in $1.4 billion in losses. Daimler is looking to unload it's share of Chrysler, but at this point will likely have to pay a massive premium to take the Auburn Hills, MI-based automaker off its books. Daimler still managed a $1.77 billion profit in 2008, though that's down from $3.77 billion just one year earlier. Don't expect Daimler to make any predictions for 2009, either. The automaker is expecting continued struggles ahead for Mercedes-Benz, as the economic downturn is pinching wealthier buyers just as much as the rest of us.
Wolfgang Bernhard is coming back to Daimler. The man who helped facilitate the sale of Chrysler to Cerebus, was instrumental in the Chrysler ME Four-Twelve supercar concept, and, most notably, the guy that drove the V10-powered Tomahawk motorcycle onto the stage at the 2003 Detroit Auto Show, will take over the van division of Mercedes-Benz on April 1st.
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