The Renault-Nissan Alliance — a strategic Franco-Japanese partnership established in 1999 — and German car maker Daimler have agreed to establish a 50:50 joint venture to manufacture premium compact vehicles in Mexico. A new plant will be built in Aguascalientes in north-central Mexico, adjacent to an existing Nissan plant.

The new facility will have an annual capacity of 300,000 vehicles and will create 5,700 jobs. Nissan’s Infiniti models will be the first cars to be produced — in 2017 — with Mercedes-Benz vehicles following in 2018. The plant is expected to be fully operational in 2021.

Renault-Nissan Alliance CEO Carlos Ghosn said that the joint venture is one of the largest projects ever undertaken by the two groups. “It also shows how our collaboration, which began in Europe, has become global in scope.”

Daimler chairman Dieter Zetsche said: “In Aguascalientes, we will take our successful partnership to the next level by combining the skills of our two companies — Daimler and Nissan — in one production plant. The decision for the new plant in Mexico is a major milestone.”