The Renault-Nissan Alliance and Daimler AG today announced a broad strategic cooperation that also involves equity exchanges that result in giving the Renault-Nissan Alliance a 3.1% stake in Daimler—1.55% for each of the two partners—and Daimler a 3.1% stake in Renault and a 3.1% stake in Nissan.

The new partners have agreed upon, and will implement with immediate effect, specific projects in the areas of a new common architecture for small vehicles; engines; and light commercial vehicles. In addition to the immediate projects, partners will explore other potential areas of collaboration, including opportunities to co-develop technologies relating to electric vehicles and batteries.

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.

—Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG

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.

—Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance

New common architecture for small vehicles. The successor to the current smart fortwo, a new smart four-seater and the next-generation Renault Twingo will be engineered on the basis of a jointly developed architecture. All vehicles will clearly differ from each other in terms of product design. One main characteristic of the new architecture will be the rear wheel drive concept used by current smart vehicles.

The launches of the jointly developed models are planned for 2013 onwards. The smart plant in Hambach, France will be the production location for the two-seater versions, while the Renault plant in Novo Mesto, Slovenia will be the production location for the four-seater versions. Right from its market launch, the jointly developed future models will also be available with an electric drive.

Powertrains. The focus of the cooperation in the powertrain area is on the sharing of highly fuel-efficient, diesel and gasoline engines between the Renault-Nissan Alliance and Daimler.

The Renault-Nissan Alliance will provide 3- and 4-cylinder gasoline and diesel engines out of its portfolio to Daimler, which will then be adapted and modified to reflect Mercedes’ characteristics. Daimler will be able to utilize Renault-Nissan Alliance engines and capture additional sales potential for Mercedes-Benz’ future lineup of premium compact cars, while the Renault-Nissan Alliance will improve its capacity utilization.

Daimler will provide gasoline and diesel engines out of its current portfolio to Infiniti. This includes 4- and 6-cylinder gasoline and diesel engines. Infiniti will be able to utilize Daimler engines, while Daimler will improve its capacity utilization.

Daimler, Renault and Nissan will also cooperate on future gasoline and diesel engines. Final production decisions for newly, co-developed engines will be taken at a later time, seeking a production network that is well balanced.

The area of engine cooperation will be driven by a technical concept that ensures the preservation and clear distinctiveness of the individual respective brand and product identities, while at the same time providing a highly competitive cost structure. First,a high level of standardization of the non-brand-relevant components will provide substantial savings for both partners. Second, the use of separate, brand-specific technology packages will ensure that the requirements of the respective brands are met.

A key objective is to increase competitiveness of all partners through a substantial increase in volumes, leading to economies of scale and cost sharing in development.

Collaboration on light commercial vehicles. The companies have also agreed on a close cooperation in the light commercial vehicle segment. Mercedes-Benz Vans will expand its portfolio to offer an all-new entry-level, intended for commercial usage, from 2012 onwards. The technical basis of this van will come from Renault and will be produced at the Renault plant in Maubeuge, France. Both partners will benefit from higher unit sales, better capacity utilization, shared investment burden, resulting in a better overall cost basis.

In addition to cooperating on small commercial vehicles, selected powertrain components will also be shared to enlarge mid-size van product offering and sales volumes. This includes a small diesel engine and transmissions which Daimler will procure from Renault-Nissan for its mid-size van, the Mercedes-Benz Vito. This additional entry-level motorization will generate additional unit sales for Mercedes-Benz and optimized capacity utilization at Renault.

Equity Exchanges. This strategic cooperation is underscored through a one-time cross-shareholding structure. The overall construction of the deal is based on the principle of a 3.1/3.1/3.1 percentage cross-holding between Renault, Nissan and Daimler; it will be transacted through an exchange of shares:

* Daimler will get 3.1% of Renault’s newly issued shares;
* Daimler will get from Renault 3.1% of Nissan existing shares;
* Renault will get 3.1% of Daimler shares
* Renault has independently agreed to exchange 1.55% of Daimler with Nissan for 2% of Nissan shares;
* Renault and Nissan will each hold 1.55 % of Daimler treasury shares.

The strategic cooperation will be managed by Renault-Nissan B.V. for the Alliance and Daimler through a new cooperation committee giving representation to all parties. The cooperation committee will be co-chaired by Carlos Ghosn and Dieter Zetsche and steered by senior executives of the three companies.

Further opportunities for collaboration. It is the intention of both groups to create a long-term framework to work closely on future areas of cooperation between Renault, Nissan and Daimler. Each company will pursue future opportunities following the closing of the agreement on the strategic cooperation and the implementation of the first major cooperation projects. These include opportunities to be studied on shared modules and components between Infiniti and Mercedes-Benz vehicles, regional cooperation in the United States, China and Japan between Nissan, Infiniti and Daimler. In addition, opportunities to co-develop technologies relating to electric vehicles and batteries will be explored between Renault, Nissan and Daimler.