Mercedes seeks partner for A, B class

Sources say PSA may help German carmaker with future development of models

Jason Stein | Harald Hamprecht | Automotive News Europe / October 16, 2006 - 1:00 am

Beginner classes European unit sales of Mercedes’ entry-premium models (8 months) 2006 2005 A class 100,327 120,210 B class 77,433 20,712 Source: JATO Dynamics

PARIS - Mercedes-Benz is looking for a partner to share costs for its next-generation A- and B-class cars.

Mercedes is expected to replace the next-generation A class in 2011 and the B class a year later. Getting a partner for the two models could help Mercedes achieve economies of scale and decrease expensive engineering costs for the vehicles.

“We have to accept that Mercedes alone will not achieve the volumes some of our global competitors have,” said Thomas Weber, DaimlerChrysler board member for research and development, in an interview at the Paris auto show. “We are thinking about our strategy for the next generation of these cars.”

D/C is the parent company of the Mercedes and Chrysler car groups.

Weber would not say which auto-maker might become D/C’s partner.

But PSA/Peugeot-Citroen is considered a potential candidate, two company sources say. PSA already has a joint venture with Mercedes rival BMW to build gasoline engines for BMW’s entry-premium Mini and for PSA’s small cars.

“We talk with everybody about everything. We do not have a final project with Mercedes, though,” said Gilles Michel, PSA’s board member responsible for platforms, technology development and purchasing.

The second-generation A class went on sale in late 2004. The first-generation B class followed in the summer of 2005.

Mercedes typically replaces vehicles after seven years.

Both cars share a costly and complicated “sandwich” platform that consists of a top and bottom cover with expensive reinforcements in the middle. A basic vehicle usually is cheaper because it consists of one sheet of metal.

The platform will not be used for the next generation of the products because it means that the A and B class cannot share engines or components with other Mercedes and Chrysler group cars.

More parts sharing

“It’s all about cost in this extremely competitive segment. The result will be a true Mercedes,” said one high-level Mercedes source, who requested anonymity. “Customers won’t spot any difference and will not care whether components are shared with Chrysler or a French company.”

Weber said sharing is an important part of the Mercedes profit model in the years to come.

“One of many questions we need to answer for our future product portfolio in the [A- and B-class segment] is the question about competitiveness and production volumes,” Weber said. “The same is true for Chrysler where we are also striving to increase volume. A possible answer may be found in shared components and in an intensive discussion about the right engines and transmissions for cars of both brands.”

DaimlerChrysler also is looking for a partner for a Dodge small car in the US. Chery Automobile is considered the favorite.