By on January 6, 2017

INFINITI QX50

After a report appeared claiming that Nissan is scrapping a joint development effort with Mercedes-Benz, the Japanese automaker’s CEO says the two partners haven’t split up.

Japan’s second-largest carmaker and Germany’s oldest made an agreement in 2010 to share engines and platforms for Infiniti and several compact Mercedes-Benz models. A new platform is planned for a cooperative factory in Mexico opening this year, and a decision to back out would throw a wrench into the future of the $1 billion plant

Each company had anticipated making use of the facility to produce smaller vehicles on the jointly-funded MFA2 architecture, minimizing production costs.

In October, Nissan decided that its premium division would not make use of the platform. According to Reuters, Infiniti was not selling enough vehicles to soak up the technology costs.

“It wasn’t possible to close a deal on the basis of MFA2,” said an inside source. “The targets set by Infiniti were too difficult to achieve.”

Daimler and Nissan told Reuters in separate statements that they’ll only pursue joint ventures when it is “beneficial for both sides.” While neither commented directly on the shared platform, both stated that talks remain ongoing. Nissan CEO Carlos Ghosn also denied that there was cause for alarm over the partnership.

“The collaboration with Mercedes is going well,” Ghosn told reporters at the Consumer Electronics Show. “Every time that we make a change in the project, doesn’t mean that the project is condemned.”

Regardless, Nissan won’t be using the small-car platform for the future Infiniti Q40 — leaving it solely for the next generation of Mercedes’ compact A-Class. The tribulation could also affect the status of Infiniti’s Q30 and QX30, both of which use Daimler’s M270 engine and ride on the same platform that underpins the GLA and CLA-Class. Nissan will likely face reduced investment in the Sunderland, England factory that produces the Q30, since it makes use of Mercedes-Benz’s tooling amenities there.

Officially, engine sharing between Infiniti and Mercedes — and Renault and Smart — remains on the table. The manufacturers haven’t weighed in on there being any problems collaborating on van or pickup projects. It’s just the small Infiniti joint that looks to be dead in the water, which it isn’t surprising considering their sad place in the market.

U.S. demand for smaller cars is way down and Infiniti has had a hard go of it in general — especially outside the United States. Last year it only managed to sell 16,000 vehicles in Western Europe and 230,000 globally.

[Image: Infiniti]

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