Nissan and Daimler are to begin production of Mercedes-Benz four-cylinder petrol engines in the US from 2014, according to reports. The engines will be built at the Japanese automaker’s powertrain factory in Decherd, Tennessee.

The companies are planning for a production capacity of 250,000 engines per year at the plant, with the mills set to be used in Mercedes-Benz cars as well as in Nissan’s Infiniti vehicles.

The Renault-Nissan alliance collectively holds a 3.1% stake in Daimler, and the German luxury car maker has an equivalent stake in each of its two alliance partners. The cooperation agreement signed last year between the three companies will see the development of small vehicles and engines, which will bring about cost synergy benefits.

In September last year, Nissan and Daimler had announced that Infiniti is to start production of a new compact car based on Mercedes-Benz technology in 2014; Renault is also looking into using Mercedes-Benz modules as well as it goes along.