FRANKFURT (Reuters) - Daimler (DE:DAIGn) and Renault Nissan (T:7201) will invest 1 billion euros (about 800 million pounds) to develop small cars and build a factory in Mexico, the companies said on Friday, in a step that deepens cooperation between the Mercedes and Infiniti brands.
The companies, which will share costs for the joint venture, said they will build a new plant with a production capacity of 300,000 vehicles in Aguascalientes, Mexico, where Nissan already has a factory.
In March, sources told Reuters that Mercedes and Infiniti plan to pool development of compact cars to cut costs, expand the German carmaker's North American production footprint and broaden the Infiniti lineup.
Nissan, Mercedes and alliance partner Renault (PA:RENA) have shared engines, plants and vehicle underpinnings for small cars since Daimler Chief Executive Dieter Zetsche and Renault-Nissan boss Carlos Ghosn forged an alliance in 2010 underpinned by token reciprocal shareholdings.
(Reporting by Edward Taylor; Editing by Harro ten Wolde)