Daimler has taken a 3.1% stake in Renault and Nissan in return for a 3.1% stake in the German manufacturer in order to share technology and development costs.

All three companies will remain separate but the deal will see the then cooperate to develop and build electric vehicles.

Both companies will cooperate on a new Smart car and a new Twingo. The companies will also be collaborating on commercial vehicles.

Dr Dieter Zetsche, Daimler chairman, said: “We know that we can make brand-typical products based on shared architectures. The individual brand identities will remain unaffected."

The strategic cooperation is underscored by cross-shareholdings among the partners.

Renault and Nissan, which are already connected by a substantial cross-shareholding, will acquire a joint interest of 3.1% in the capital of Daimler while Daimler will acquire 3.1% in each of Renault’s and Nissan’s equity.

Zetsche said: "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."

Carlos Ghosn, chairman and CEO of the Renault-Nissan Alliance, said: “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."