Mercedes and Renault are making sweet music together, and the fruits of their loins - due in 2013 - will be christened Smart and Twingo.
Daimler-Benz and the Renault-Nissan alliance have been quietly studying a deal for their next-generation tiny tots for some time now. They gradually realised they have several other common interests, so have actually formed a strategic alliance. They will take out a 3.1 per cent shareholding in each other, mainly to prove to themselves they're serious.
The first result of the deal will be a new rear-engined tiny-car platform. The Smart fortwo version will retain the distinctive visible safety cell, said Mercedes boss Dieter Zetsche today. It'll be motivated by a new three-cylinder engine jointly developed by the two corporations, and will come in hardtop and cabrio versions.
There will also be a four-seat version. This is the one that will be developed in congress with Renault. Both will also be rear-engined rear-drive, using a new Renault-Nissan three-cylinder engine. The Smart and the Renault will have completely different body designs, we're promised by the bosses. And both will also get a pure-electric version from the start.
The next-generation A-Class, due in just two years, will also use this new family of three-cylinder engines, as well as upgraded editions of the current Renault small turbo four-pot petrol and diesels.
The next A-Class will spawn a much more interesting range than the one they make now. It will come in tall double-floor types (the same idea as the current A-Class), but there will also be a some lower-bodied versions.
The tall-body A-Class will be the family hatch, and can be had in fuel-cell and electric versions because the double floor gives room to store batteries and range-extending engines.
Mercedes had been looking for a partner to develop the new Smart and A-Class for about two years now. It knew it needed these cars, to get its corporate average CO2 down. But it also knew it was going to be too crushingly expensive to engineer completely new cars and powertrains - petrol, diesel, electric, hybrid, fuel-cell... parsnip-and-beetroot powered.
Having found Renault, Mercedes found they got on well. Before long the Germans found other things they could do with Renault and its alliance partner Nissan, and the idea of a deeper partnership took root.
Next on the agenda: Infinitis will get Merc four-cylinder and V6 diesel and petrol engines. And some vans. But we won't worry about them.
Paul Horrell, Consultant Editor of TopGear magazine