Carmakers Renault , Nissan Motor Co Ltd <7201.T> and Daimler on Wednesday said they would swap stakes and jointly develop cars as part of partnership plans aimed at gaining scale and sharing costs.

Daimler will take 3.1 percent shareholdings in Renault and Nissan, who will both hold 1.55 percent of the German carmaker under the deal, the companies said on Wednesday.

Renault's Nissan stake would slip to 43.2 percent from 44.3 percent.

The three carmakers plan to cooperate on electric cars, passenger cars and light commercial vehicles, as well as jointly developing and sharing diesel and gasoline engines for Daimler's Smart small-cars and others, Nissan said.

Renault and Daimler have been discussing cooperation plans as carmakers worldwide seek to become more competitive by sharing technology investment costs and gaining scale.

The automobile sector is scrambling to meet tightening emission rules as it emerges from a savage downturn that has highlighted the need for profit-chasing carmakers to boost scale, conquer new markets and increase efficiency.

Daimler, which along with the luxury Mercedes-Benz brand owns struggling Smart, is set to benefit from Clio-maker Renault's small-car expertise, while Renault and Nissan will be able to make use of Daimler's engine know-how.

The Renault-Nissan alliance and Daimler will set up a strategic committee to be chaired by Carlos Ghosn and Dieter Zetsche.

The French state owns 15 percent of Renault and industry minister Christian Estrosi said on Tuesday it would remain its main shareholder following the Daimler deal.

Renault shares closed up 3.86 percent at 36.87 euros and Daimler shares were up 0.28 percent at 35.505 euros, on Tuesday, against a European auto stocks index <.SXAP> 0.80 percent higher.

Daimler AG