Daimler-Benz Looks to Asia With Nissan Diesel Talks
The news that Daimler-Benz is negotiating a collaboration on trucks with Nissan Motor Co. signaled that the German firm, which just last week agreed to acquire Chrysler, has major aspirations in Asia as well.
Daimler-Benz, soon to become DaimlerChrysler, is expected to acquire most or all of Nissan Motor’s stake in its heavy-duty truck manufacturing affiliate, Nissan Diesel Motor Co. Nissan Diesel is the smallest of Japan’s 11 vehicle manufacturers.
Nissan Motor, Japan’s No. 2 auto maker, owns 39.8% of Nissan Diesel. Discussions focus on Daimler-Benz buying at least a controlling 33.4% stake in the truck maker, Japanese newspapers and television reported Monday.
In a joint statement, Nissan Motor and Nissan Diesel said that the affiliated Japanese firms are talking with Daimler-Benz about “a possibility of establishing a business tie-up” including cooperation in development, production and sales of commercial vehicles.
“There is a possibility that a cooperative business relationship will extend beyond the aforementioned areas of cooperation as the talks develop,” the Nissan statement added. “Nonetheless, nothing has been decided on the reported Daimler-Benz AG’s capital participation in Nissan Diesel Motor Co.” The talks began several months ago, it said.
“It is very positive for Daimler. It is still very weak in Asia, particularly in commercial vehicles,” Rolla Kautz-Pan, an analyst at BHF Bank in Frankfurt, said.
Daimler is already well-established in heavy trucks through its Actros line in Europe and through its Freightliner range in the United States and could benefit from Nissan’s foothold in Asian sales of smaller commercial vehicles.
Daimler-Benz sold about 8,000 trucks in Asia in 1996, the last year for which figures are available, while Nissan Diesel sold more than 40,000. Nissan Diesel has a joint venture in China that makes 14-ton trucks.
Daimler-Benz said: “We want to expand our activities in Asia and we are currently talking to several companies about possible cooperation.”
Another possible area of cooperation, analysts said, could be at underutilized Nissan plants overseas.
Nissan Motor stock, which had plunged 5.4% Thursday on fears of greater global competition triggered by the DaimlerChrysler deal, soared 9.8% Monday to close at $3.27 cents. Trading in Nissan Diesel was suspended Monday because of overwhelming “buy” orders, but bid prices skyrocketed 31% to $1.58.
The possible sale would be worth about $95 million if Daimler-Benz bought all of Nissan Motor’s stake in Nissan Diesel at Friday’s closing price.
Nissan Diesel last month estimated that its pretax loss for the fiscal year ended March 31 will be about $9 million, on sales of $2.5 billion. It was the firm’s second money-losing performance in five years, and observers have questioned whether Nissan Motor can afford an affiliate that is not reliably profitable.
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Reuters News Service also contributed to this story.
