The project will create a new mid-size pickup for Mercedes-Benz, focusing on Europe, Australia, South Africa and Latin America.

IHS Automotive senior analyst Stephanie Brinley said: “Mercedes-Benz is entering a segment in which they perceive room for a luxury variant to get on board, but which it does not have significant history or expertise with. In working with Nissan, Mercedes gets the truck faster and at less cost, while Nissan can use the Mercedes relationship to absorb some of its production output and its costs. Production of the Mercedes-Benz product is due “by the end of the decade,” however, indicates the luxury maker will take its time in adapting the Nissan architecture for a premium pickup. The next Nissan is due into production by the end of 2015. Additionally, Nissan has available capacity in Barcelona and the Cordoba plant is an all-new facility, due on line in 2016, according to IHS Automotive data.

“Mercedes will offer the truck in crew-cab form only, which is the preferred bodystyle for lifestyle users, and an additional cue that this is not meant to be a work truck. Nissan has a history of global success in this segment, but moving the platform and truck to the levels expected by luxury buyers is likely a considerable undertaking. The decision to focus on less-demanding markets than the US, at least initially, allows Mercedes to grow its own expertise ahead of challenging the extremely competitive and specific US mid-size truck market.

“While the partners did not indicate what the split would be, the two plants earmarked for this truck will build only a total of 190,000 units, with 120,000 of that being built in Europe and 70,000 in Argentina. Nissan has other facilities to serve its own brand, and will supplement Renault production in Cordoba with output in Mexico. The Mercedes is being planned for Cordoba and Barcelona only.

“IHS pegs the global compact pickup segment at about 2.34 million units in 2014, growing to 2.83 million units in 2020. Looking at the various regions in which Mercedes says it wants to play, in Australia, pickups account for about 14% market share, in Brazil about 5%, while in South Africa, the segment is about 18%. In Europe, however, C-segment pickups account for only 1% of the market. With segment sales flat for the next several years, the share does not change dramatically through 2020. Between 2014 and 2020, IHS forecasts sales in Australia to see a compound annual growth rate of only 1.2%, in Brazil less than 1% and in South Africa a CAGR of 3.3%. Mercedes has selected markets with relatively small growth, seeming to take the bet that opportunities for longer-term improvements in economic conditions that may pave the way for buyers of the existing C-segment trucks to choose a more premium entry.”