Daimler, Nissan and Renault confirmed Wednesday a wide-ranging partnership that includes Renault Nissan Daimler logo.jpg equity stakes in each other, joint development of vehicles -- from small cars to light commercial vehicles and possibly luxury cars -- and technology sharing on batteries, electric cars and powertrains for small to luxury autos.

The partnership is the latest step in the consolidation of global automakers forced by the roller-coaster economy and waning corporate profits at a time when automakers must invest substantially in low-margin small cars and expensive technologies to meet more stringent emission and fuel economy standards.

In the past year, Fiat acquired a stake in Chrysler and Volkswagen in Suzuki to achieve similar economies of scale, particularly for small cars - and as a way to take on global volume leader Toyota.

Daimler CEO Dieter Zetsche and Nissan-Renault CEO Carlos Ghosn made the announcement jointly in Brussels Wednesday, after which they held a conference call with American media.

"The name of the game is to be present everywhere so we are going to move for more and more consolidation," Ghon told reporters.

Added Zetsche: "Our skills complement each other very well. Right away, we are strengthening our competitiveness in small and compact car segments and are reducing our CO2 footprint -- both on a long-term basis."

Elements of the Deal

Small cars: Renault and Daimler will jointly develop the next generation of Smart Fortwo models, including electric versions and the Renault Twingo. The two vehicles will share architectures and parts. Electric versions will be available at launch.

It was small-car joint development that prompted talks between Daimler and Renault last December. Zetsche said Daimler had concluded it could not competitively make small cars because of high costs and low volumes so it began negotiations with Renault. The talks eventually expanded into equity swaps and a wider range of projects.

The automakers said the jointly developed Smart and Renault models would be launched starting in 2013. Two-seaters will be built at Smart's plant in Hombach, France. Four-seaters will be built at Renault's plant in Novo Mesto, Slovenia.

Daimler, Renault and Nissan will also jointly develop gasoline and diesel engines for the Smart and Twingo. The same engine will be modified for a new generation of premium compact cars for Daimler's Mercedes-Benz luxury marque, including the next-generation Mercedes-Benz A- and B-Class cars. Jointly produced transmissions will go into those cars as well.

Technology sharing: The companies will explore joint development of technologies related to electric vehicles and batteries. Nissan has an aggressive electric-vehicle strategy that kicks off with the introduction of the Nissan Leaf.

Powertrain sharing: Daimler will provide gasoline and diesel engines, four- and six-cylinder engines -- for Nissan's premium cars, including its Infiniti luxury brand. Nissan-Renault will share its three- and four-cylinder gasoline and diesel engines with Daimler.

The arrangements will help both companies financially by filling factory capacity.

Powertrain sharing: Daimler will provide gasoline and diesel engines, four- and six-cylinder engines -- for Nissan's premium cars, including its Infiniti luxury brand. Nissan-Renault will share its three- and four-cylinder gasoline and diesel engines with Daimler.