Daimler will develop a new range of fuel-efficient petrol engines with Renault and license its automatic transmissions to Nissan and its upscale Infiniti brand, under agreements announced by the companies on Friday at the Paris auto show.

The joint programs will save production and development costs for all three companies, with output expected to run to more than 3 million of the four-cylinder engines, Renault-Nissan alliance chief Carlos Ghosn and his Daimler counterpart Dieter Zetsche told reporters.

Under their 2010 partnership agreement, Renault-Nissan and Daimler have already joined forces to build small cars such as the Renault Twingo, Mercedes A-Class and Smart, as well as and engines - with production at Nissan's Tennessee factory announced earlier this year.

Mercedes is also sharing its front-wheel-drive car platform for a new Infiniti model due around 2014.

This year sees the first jointly developed vehicles taking to the road, including the A-Class with Renault engines and Mercedes Citan van - built at the French automaker's plant in Maubeuge alongside its own Kangoo model.

Renault holds a 44 percent stake in alliance partner Nissan, which in turn owns 15 percent of the French automaker, with Ghosn heading both companies. Renault-Nissan and Daimler also hold small stakes in each other's capital, purchased in 2010 to cement the three-way partnership.

(Additional reporting by Gilles Guillaume)

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