Daimler and Renault have announced a step forward in the merger of their operations with an agreement to produce light commercial vehicles together. The new van models will be designed and produced in Japan. 

The move comes as the carmakers continue plans for a joint engine production plant in Decherd, Tennessee, set to go online in 2014.

The manufacturers have been steadily adding schemes and initiatives over the past three years of their alliance. Originally, the partnership focused its efforts in Stuttgart through Daimler’s Smart city cars and Mercedes delivery vans. 

At the International Auto Show in Frankfurt last week, the companies confirmed that Renault-Nissan will supply Daimler with the NV350 Urvan, which will be sold in selected export markets and branded under Mitsubishi Fuso. 

Plans to develop the four-cylinder gasoline engine facility were begun last year, with the engines being used in the Mercedes-Benz C-Class, and the Nissan Infiniti. However, Renault and Nissan’s CEO Carlos Ghosn confirmed at the Frankfurt show that Mercedes and Infiniti are not competing for the same customers. “Cross shopping between the two brands is limited,” he said. 

Bloomberg have also reported that the manufacturers are considering negotiations for future compact car models on which they might collaborate.