Daimler AG and the Renault-Nissan Alliance have agreed to join forces -- and swap minor equity positions -- in a deal that will expedite development of small and commercial vehicles for both as well as have each share powertrain components, cut production and procurement costs and adopt common best-practice techniques. Under terms of this new pact, the Renault-Nissan Alliance will get a cumulative 3.1-percent stake in Daimler which will be shared equally while the German firm will take a 3.1-percent position in Renault and an equal position in Nissan.

On a nuts-and-bolts basis, the two automakers have already agreed to work on common platform architecture for the next-generation smart fortwo and Renault Twingo models, both due to arrive in 2013. In addition to new electric variants of each, a four-passenger smart forfour also will be produced. With respect to powertrains, the plan calls for the Renault-Nissan Alliance to provide three- and four-cylinder gasoline and diesel engines to Daimler -- which will be specifically adapted to Mercedes-Benz spec -- and for Daimler to reciprocate with four- and six-cylinder gasoline and diesel engines out of its portfolio for use in various Renault-Nissan products, including future Infiniti models. The firms also plan to explore opportunities to co-develop future electric vehicle platforms and battery technologies.

Although details on some upcoming powertrain programs are still being worked out, the underlying goal is to promote greater economies of scale in the realm of "non-critical" basic components while maintaining and preserving a clear corporate distinction through the use of brand-specific technology packages where it matters most to consumers. This cooperative commitment extends to the light commercial segment, as well. In 2012, Mercedes-Benz will begin offering a new entry-level van based on a Renault design and built at one of its factories in France. Mercedes also confirmed plans to use select Renault powertrain components in its mid-size Vito van.

According to Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and head of Mercedes-Benz Cars, "Daimler and the Renault-Nissan Alliance are combining common interests to form a promising foundation for a successful, strategically sound cooperation that is based on a number of very concrete and attractive project cooperations. Our skills complement each other very well. Right away, we are strengthening our competitiveness in the small and compact car segment and are reducing our CO2 footprint -- both on a long-term basis. We know that we can make brand-typical products based on shared architectures. The individual brand identities will remain unaffected."

Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, said: "The Renault-Nissan Alliance knows how to work successfully in collaborative partnerships and this experience is extremely valuable in today's -- and even more -- tomorrow's global auto industry. This agreement will extend our strategic collaboration and create lasting value for the Renault-Nissan Alliance and Daimler as we work on broadening and strengthening our product offering, efficiently utilizing all available resources and developing the innovative technologies required in the coming decade."

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