French-Japanese alliance Renault-Nissan has hopes to reach an agreement with German partner Daimler to deepen the alliance between the carmakers during the first quarter of next year.

People with knowledge of the discussions said the two parties agreed on the benefits of a closer relationship, but that no details or exact timelines had been officially finalized. The agreement would allow Daimler to build Mercedes-Benz cars in Renault-Nissan’s factory in Mexico, increase the use of Renault engines in luxury Mercedes models and strengthen co-operation on future models for Nissan’s premium Infiniti brand.

“It will take some months to become public, ” said one of the people.

Any agreement would come as all global carmakers explore partnerships and joint ventures to reduce costs and grow in new markets. The moves are designed to cope with the worst European car market in two decades and unprecedented pressure to innovate into new areas, such as more fuel-efficient cars.

Renault and Nissan, which have operated in a global alliance since 1999 that has seen both benefit from billions of euros worth of cost savings and production sharing, agreed in 2010 to begin co-operation with Daimler on defined projects.

Via Financial Times


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