The two firms have announced today that they are to co-operate on a large number of future projects and are also to take stakes in each other.

Under the equity exchange, Renault-Nissan will get a 3.1% stake in Daimler and Daimler in return will receive a 3.1% in Renault and a 3.1% stake in Nissan.

A particular highlight of the agreement is the development of a joint small car platform, which will be used as the basis for the successor to the current smart fortwo, a new smart four-seater and the next-generation Renault Twingo. The platform will include the rear-wheel drive currently used by smart vehicles and electric versions are on the cards too. However, the carmakers are at pains to point out that all vehicles will 'clearly' differ from each other in terms of product design.

The deal will also see co-operation in other areas including widespread powertrain sharing and collaboration in the field of light commercial vehicles.

The groups will also explore additional synergies covering purchasing opportunities and operational benchmarks and best practices. Carlos Ghosn, chairman of Renault-Nissan Alliance, has said that the companies expect to see savings of €2 billion (£1.8 billion, $2.7 billion) from cost reduction and additional business over several years.

Dieter Zetsche, chairman of Daimler AG, said: '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 added: '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 utilising all available resources and developing the innovative technologies required in the coming decade.'