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Smart brand will be built in China as a Daimler-Geely joint

FRANKFURT/BEIJING — Daimler will build its next generation of Smart electric cars in China through a joint venture with Geely, as a way to increase economies of scale in a market segment that is struggling to turn a profit. China's Geely built a stake of almost 10 percent in Daimler last year, saying it wanted to forge an alliance to develop electric and self-driving cars to better compete against new challengers such as Uber and Google. Daimler said on Thursday it would build the next generation of Smart-branded city cars at a purpose-built factory in China, and planned to share its expertise in manufacturing, engineering and design with Geely. The high cost of electric car batteries has made it hard for automakers to build affordable zero-emissions vehicles, leading several of them to strike alliances with Chinese partners. Daimler's German rival BMW recently unveiled plans to build electric Minis in China, where production costs are low and demand for small electric cars is rising. Daimler and Geely did not disclose financial terms of their deal. The details of the joint venture will be finalized by the end of 2019, they said in a joint press release. Daimler currently develops and builds Smart cars with Renault at factories in France and Slovenia. The Daimler factory in Hambach, France, will be retooled to build Mercedes-Benz cars. Geely has been expanding rapidly through mergers and acquisitions since 2010, when it acquired Swedish carmaker Volvo from Ford. Last year, Daimler and Geely set up a ride-hailing joint venture in China. Daimler's Chief Executive Dieter Zetsche said last month the German carmaker was in talks to deepen its alliance with Geely after the Chinese's group's chairman Li Shufu bought a 9.69 percent stake in Daimler in 2018.

Mercedes calling in CLS, E-Class over rubber seal fire risk

Mercedes-Benz has discovered a problem with certain E-Class and CLS-Class models and has notified the National Highway Traffic Safety Administration of a recall it's undertaking to resolve the issue. The problem is with the rubber seal at the back of the engine bay, which according to the statement below "may temporarily stick to the hood when it is opened and then may fall into the engine bay when the hood is closed." If it then comes into contact with the exhaust system, it could start a fire. And fires in the engine bay are never a good thing, unless they're contained entirely within the combustion chamber. The issue affects an estimated total of 147,224 E-Class and CLS-Class vehicles, all told, across America – including four-doors, wagons, hybrids and AMG performance models (but no E-Class coupes or convertibles) from the 2013-15 model years. To fix the problem, Benz dealers will simply need to attach four additional clips to keep the seal in place, and will start doing so midway through next month. RECALL Subject : Rubber Seal may Dislodge and Contact Exhaust Report Receipt Date: FEB 13, 2015 NHTSA Campaign Number: 15V088000 Component(s): STRUCTURE Potential Number of Units Affected: 147,224 Manufacturer: Mercedes-Benz USA, LLC. SUMMARY: Mercedes-Benz USA, LLC. (MBUSA) is recalling certain model year 2013-2015 E350 Sedan, E350 4Matic Sedan, E350 4Matic Station Wagon, E400 Hybrid Sedan, CLS 550 CGI, and CLS550 4Matic, 2013-2014 E550 4Matic Sedan, 2013 E63 Sedan, E63 Station Wagon and CLS63, 2014-2015 CLS63 4Matic, E63 4Matic Sedan, E63 4Matic Sedan "S", and E63 4Matic Station Wagon, 2015 CLS400, 2015 E400 Sedan, E400 4Matic Sedan and CLS400 4Matic and 2014 CLS63 "S". The affected vehicles have a rubber seal at the back of the engine bay that may temporarily stick to the hood when it is opened and then may fall into the engine bay when the hood is closed. CONSEQUENCE: If the rubber seal falls into the engine compartment, it may contact parts of the exhaust system, increasing the risk of a fire. REMEDY: MBUSA will notify owners, and dealers will attach four additional retaining clips to the rubber seal, free of charge. The recall is expected to begin by mid-March 2015. Owners may contact MBUSA customer service at 1-201-573-5339. MBUSA's number for this recall is 2015020001. NOTES: Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 (TTY 1-800-424-9153), or go to www.safercar.gov.

Daimler and Geely collaborate to develop 'a highly efficient modular engine'

BERLIN — German car maker Daimler said on Tuesday it will cooperate with China's Geely to build next-generation combustion engines for use in hybrid vehicles. Efforts to share development costs come as the growth potential for combustion engines faces the twin threat of the COVID-19 crisis and stricter fuel-efficiency and emission rules. "The companies plan to develop a highly efficient modular engine," a spokesman for Daimler said, adding that it would be used in hybrid drivetrains and manufactured in Europe and China. Geely declined to comment. The modular engine will be used in cars under different marques at Geely and Daimler, a person familiar with the matter said on condition of anonymity as the companies are still in the early stages of developing the engine. News of the alliance was a surprise to Daimler's works council at its factory in Untertuerkheim, which specializes in electric and gasoline powertrain assembly. "We are speechless. There was not even a discussion about potential alternative manufacturing locations," said Michael Haeberle, the works council chief for Untertuerkheim. "We have the ability to build four-cylinder engines in Untertuerkheim, but there were no talks about it." Daimler said German factories will be retooled gradually to add electric drivetrains production. Most of the next-generation combustion engines will be made in China, business daily Handelsblatt reported. The alliance with Geely, which owns a 9.69% stake in Stuttgart-based Daimler, means that parts of Daimler's existing partnership with Renault could be pared back. A Renault source told Reuters that the Daimler-Geely project does not mean an end of cooperation between Daimler and Renault. Citing Daimler sources, Handelsblatt said the Daimler-Geely pact would save the German carmaker a "triple-digit million sum" — implying an amount above 100 million euros ($119 million) and less than 1 billion euros. Green Mercedes-Benz Volvo Hybrid Daimler Geely