Daimler-Benz and the Renault-Nissan Alliance will be joining forces to share platforms for future small cars and light commercial vehicles, and power trains for a wide variety of products.
The next-generation Smart-for-two, a new four-seater Smart and the next Renault Twingo will likely be the first fruit of this menage-a-quatre, as they will share underpinnings. Both companies are adamant that the specific products will retain the characteristics unique to each brand.
The French-Japanese side will provide smaller-displacement (three- and four-cylinder) Diesel and gasoline engines to Stuttgart, while larger engines will move the other way for future Infiniti vehicles.
Both Renault and Mercedes are very strong in compact and mid-size commercial vans; production efficiencies from economies of scale and broadening of each brand's product line are the expected benefits of this cooperation.
Stock transfers between the two companies are part of the deal, but they are in the single-digit percentage range - more symbolic than significant.
Among the ironies here is that both companies have gone through close relationships with Chrysler. Chrysler bought the remains of American Motors from Renault in 1987, primarily for its Jeep brand; Chrysler and Mercedes had what proved to be an ill-advised 'merger of equals' (read: takeover) in 1998, the union ending in divorce in 2007.
Most industry pundits believe this sort of thing - mergers; joint ventures; parts-sharing - will occur ever more frequently, as the costs of developing a new model are so great that few companies can afford it on their own.
Will this new association be any more successful than past ones have been?
Only time will tell, but it looks like a good fit to me.