'History is made in the Automotive Industry with the coming together of the French, Japanese and German Auto brands Renault-Nissan and Daimler to make better cars for the future. With an increasingly competitive external business environment for most global automakers, partnerships are an ideal way to take advantage of shared vehicle and powertrain development costs, reduce risk and investment required for new product areas such as micro/ city cars, electric vehicles etc. Renault and Daimler each expect synergies to the tune of €2 billion, with Daimler tapping into Renault-Nissan's expertise on small, fuel-efficient and low CO2 cars while in turn sharing some of its know-how on engines.

'The auto industry is not new to strategic partnerships for product development as is evident from earlier tie-ups such as the PSA-Toyota joint venture to manufacture small city cars at Kolin in Czech Republic or the BMW-PSA joint venture that produces engines used in the MINI, Peugeot and Citroën brand models. With stringent ACEA fleet CO2 emission targets for European manufacturers around the 130g/km mark and recently announced CAFÉ targets for fuel efficiency and 250 g/mile of CO2, luxury and volume manufacturers are racing towards time to make their cars green and emission compliant. Daimler's Mercedes brand in Europe had one of the highest fleet average emissions, at 175g/km in 2008, and the company is trying to reduce fleet emissions through introduction of smaller downsized engines and low CO2 variants across its model line-up. There could be synergies in powertrain development and sharing across entry level A-Class, B-Class cars and the Renault Clio platform, while the smart could share some its platform with the Twingo.

'There is some scope for co-operation in the field of electric vehicles too, where Renault-Nissan is on track for series production of its electric cars by 2011, while Daimler is on a fleet testing phase with its 3rd generation of electric Smart fortwo cars in Berlin. While sceptics are still wary of Daimler's earlier failed partnership with Chrysler, its strategic tie-up for product development under the current light of events looks promising. And Renault-Nissan customers would definitely appreciate some German engineering under their bonnets.'