Nissan and Daimler have inked a deal to build a new plant in Aguascalientes, Mexico, that will eventually produce 300,000 Infiniti and Mercedes-Benz vehicles annually. The $1.4-billion plant, which will employ 5,700 workers, will be adjacent to a facility that currently produces Nissan cars. 

The partners declined to identify the specific vehicles slated for production, only saying that they will be in the compact class. It's likely that they will be a new crossover SUV, most likely the Mercedes GLA and a similar entry for Infiniti, which can use the same architecture. Infiniti showed the similarly sized Q30 concept at last year's Frankfurt Motor Show.

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Moving on up

Mexico has been gaining importance for not only producing small economy cars like the Honda Fit, Mazda2 and Nissan Versa, but also now entry level luxury cars. The lower production costs allows manufacturers to sell these vehicles profitably at competitive costs below what they would be able to charge if the vehicles were built either abroad or in U.S. This latest move will be the first luxury cars to come from south of the border, although Audi has also announced plans to build vehicles in Mexico and there are rumors that BMW may soon follow suit.

The first Infiniti models are expected to start rolling out of the new plant as early as 2017 followed a year later by the Mercedes-Benz variants. In addition to producing vehicles in Mexico, Nissan and Daimler have teamed up to produce about 250,000 turbocharged 2.0-liter 4-cylinder gasoline engines per year in Decherd, Tennessee. Those engines are slated to be exported to Japan for installation in European-bound and 2016 U.S. spec Infiniti Q50 models and for use in Mercedes C-Class sedans built at the German company's Alabama assembly plant. These engines conceivably could find their way into the new Mexican-built products.


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