CAR firms Nissan and Renault have announced plans to create a joint company.

Renault-Nissan BV will see Renault increase its 36.8 per cent stake in Nissan to 44.4 per cent, while Nissan will take a 15 per cent stake in Renault.

Representatives from Nissan and Renault will join the alternate boards as non-executive members.

A memorandum of understanding will be signed by Renault chairman and chief executive Louis Schweitzer, Nissan chairman Yoshikazu Hanawa, and Nissan president and chief executive Carlos Ghosn.

Under the memorandum, Renault and Nissan will create Renault-Nissan BV, a joint and equally owned management company operating under Dutch law. It will have headquarters in Paris and Tokyo.

The venture, to be launched in the early part of next year, will steer strategy and supervise common activities on a global level, while respecting the identity and culture of each company.

The agreement is still subject to consultation and approval of Renault and Nissan as well as the French and Japanese market authorities.

The company will have sole responsibility for decisions on mid and long-term planning during the next three, five and ten years, on commonalties in products, and on principles of financial policy. Renault-Nissan BV will also make proposals to Renault and Nissan on issues such as the creation of joint companies, changes in market or product coverage, investments and third-party strategic co-operation.

Existing cross company teams, which have been building the alliance over the past two and a half years, will report to Renault-Nissan BV.

The position of president of Renault-Nissan BV will be held by the chairman and chief executive officer of Renault and that of vice-president by the president and chief executive of Nissan.

Six executives from both companies will complete Renault-Nissan BV's management team.

Mr Hanawa said: "This move is the next natural step in the evolution of our alliance.

"It demonstrates that a Japanese and a French company have been able to co-operate successfully, without losing their uniqueness."

Mr Schweitzer said: "This project provides for stronger strategic management to move the Alliance forward in a balanced way, reaching for higher performance within both companies.

"Renault and Nissan are successfully building a strong bi-national group, which is unique in the automotive industry.