PARIS (Reuters) -- Daimler AG and Renault-Nissan are extending their manufacturing alliance to include engines and transmissions.
The partnership will include an agreement for Renault to supply Daimler with a 1.6-liter four-cylinder diesel engine for use in its Mercedes-Benz C class, Daimler said in a statement today.
Mercedes in turn will supply its 2.0-liter four-cylinder gasoline engine for use by Nissan's premium brand, Infiniti.
Nissan also has been granted a license to make Daimler's nine-speed automatic transmission for use in Infiniti vehicles.
Daimler and Renault-Nissan added that there were no limits to how the cooperation could evolve.
"We maintain the attitude that everything is on the table. There are no sacred cows," Renault chief Carlos Ghosn said at a news conference with Daimler Chief Executive Dieter Zetsche at the Paris auto show.
Both executives said projects under the alliance had ballooned from the three planned initially to 12 now and, according to Ghosn, were yielding significant cost savings in excess of $2.5 billion (2 billion euros).
Mercedes, Nissan and Renault have shared engines, plants and vehicle underpinnings for small cars since Zetsche and Ghosn forged an alliance in 2010, cemented by token reciprocal shareholdings.
The pact is one of the few remaining alliances between a volume and a premium carmaker that has survived, in contrast to Daimler's messy divorce with Chrysler and BMW's sale of Rover.
Rear wheel architecture
The companies said they had also struck a new cooperation deal on transporter vans. Nissan will supply Daimler's Japanese commercial vehicles unit Mitsubishi Fuso Truck and Bus Corp. with a transporter van to be sold under the Fuso brand in key export markets.
Nissan's NV350 van will be marketed as a Fuso Canter van in markets in the Middle East, starting this year.
Sharing development, procurement and even manufacturing costs helps both companies make savings, Ghosn said, adding that both companies measured the gains from the alliance each year by looking at things including goods, assembly and royalties.
"Based on projects underway and planned we expect annual revenue between the companies to more than double in the next six years," Renault-Nissan chief Carlos Ghosn said, declining to elaborate on what the figure would be.
In June, Daimler and Nissan announced they would share costs to develop and build premium small cars, including building a production line with an annual capacity of 300,000 vehicles in Aguascalientes in central Mexico, where Nissan already has a $2 billion manufacturing complex.
Projects between Renault, Nissan and Mercedes are assessed on a case-by-case basis, Ghosn said, adding there was no attempt to favour cooperation with any particular partner.
"Projects of the future are very balanced," he said, adding that more companies could theoretically join the alliance.
Both companies had looked at extending a cooperation to include using the Mercedes Rear Wheel Architecture, but no feasible business case had been identified.
The level of cooperation between Mercedes, Infiniti and Renault-Nissan had matured and was no longer dependent on either of the chief executives for encouragement.
"If ever one of us would decide not to continue in his job, cooperation would continue," Zetsche said.