Mercedes, Nissan joint venture in Mexico faces cloudy future

Kallenius’ cloudy assessment gives credence to industry chatter that the COMPAS venture is sputtering as Mercedes and Infiniti pivot their U.S. lineups toward electric vehicles.

Forecasting firms LMC Automotive and AutoForecast expect production at the Mexico plant to end around mid-decade.

“The outlook for the underutilized COMPAS plant is dim because there’s no product allocated beyond 2026,” AutoForecast Solutions vice president Sam Fiorani told Automotive News.

Last year, the factory assembled 108,681 vehicles — significantly under half of its 230,000 capacity, according to AutoForecast. Even at its production peak in 2020, the factory managed less than 50 percent of installed capacity.

LMC’s president of global forecasting, Jeff Schuster, said the Mexico plant’s low output does not deliver the scale to support regional production. “It defeats the purpose of the joint venture,” Schuster said last year.

Some of the compact models built at the plant have struggled to find traction in a market that favors large vehicles.

U.S. sales of the Infiniti QX50 tumbled 42 percent last year, exacerbating the brand’s multiyear sales slump.

Mercedes pulled output of the A-Class subcompact sedan out of the COMPAS two years after production started and halted U.S. sales after the 2022 model year.