The joint company, to be called "Renault Nissan Purchasing Organisation", is initially expected to handle about 30 per cent, or $14.5 billion, of Renault and Nissan's total annual global purchasing turnover of $50 billion.

The two companies said that figure was expected to rise to 70 per cent, or $35 billion, over the coming years. "Compared to the current separate organisations, this joint purchasing organisation would provide additional savings, especially 5 per cent on common projects, starting with the C-platform," the companies said in a joint statement.

Paul Besancon, executive secretary of the cross- company team for purchasing, said benefits from common projects would begin to show through from 2005. "In addition there will be immediate savings of 1 per cent from economy of scale benefits and by virtue of the added pressure a larger group can exercise over suppliers," he said. At the time of the joint company's launch in April 2001, the scope of the joint project would consist of 17 families of commodities from power train components, vehicle parts, raw materials and services. The group will have operations in Europe, Japan and the US and a staff of less than 100 people from both companies upon its launch.