Infiniti suspends development of small luxury car with Daimler – report

Infiniti has put work on its small luxury car on hold, due to a rapidly changing market landscape and fears over new tariffs.

According to the business newspaper Nikkan Kogyo, Nissan has pulled the plug on a small luxury car being developed with the help of Daimler.

Two main reasons were cited for the abandonment of the project: a big shift in the US away from passenger cars towards trucks and crossovers, and uncertainty over the future of NAFTA, or the North American Free Trade Agreement.

US President Donald Trump has called for a renegotiation of the free trade zone, which encompasses the US, Canada and Mexico, and has threatened to impose tariffs on goods imported from its northern and southern neighbours. He recently authorised tariffs on around US$50 billion ($67 billion) worth of imports from China.

The new small luxury car was to be built in a factory in Mexico.

Shiro Nagai, a spokesman for Nissan, told Automotive News he can't comment on the report.

"The cooperation between the Renault-Nissan-Mitsubishi Alliance and Daimler is solid and we continue to reap the benefits of our successful cooperation, which includes a number of R&D and manufacturing initiatives around the world," Trevor Hale, an Infiniti spokesman, told the trade publication.

Fruits from the partnership between the Germany luxury car maker and the French-Japanese alliance include a jointly developed engine being produced in the States, and the Mercedes-Benz X-Class ute, which is based on the Nissan Navara.

The Infiniti Q30 and QX30 (above) are both based on the Mercedes-Benz MFA platform used for the GLA, CLA and previous-generation A-Class. These two models are produced in Nissan's plant in Sunderland, UK, but employ many Daimler components, including drivetrains.

In addition to this, there's a new a jointly owned and operated factory in Aguascalientes, Mexico, which can make up to 230,000 vehicles a year, and currently produces the second-generation Infiniti QX50.

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