New company will develop a new minicar model for both automakers by 2012. The two Japanese automakers may also jointly develop electric vehicles in the future.

Japanese automakers Nissan Motor Co. and Mitsubishi Motors Corp. have announced a new 50-50 joint venture to develop minicar models they will sell around the world.

According to the terms of the deal, the new company would have a minicar model available to both automakers by 2012.

The partnership also involves Nissan providing a light van and wagon models to Mitsubishi for the Japanese market and Mitsubishi in turn supplying an SUV to Nissan to sell in the Middle East.

"This agreement is important for Nissan as it supports our expansion in emerging markets, meets immediate capacity needs overseas and enables us to grow our minicar business in Japan," said Renault-Nissan's CEO Carlos Ghosn in a press statement.

Mitsubishi and Nissan already cooperate on numerous projects, including building small engines for minicars under 660 cc. The two automakers also raised the possibility of working together to develop electric models too.

"The expansion of the agreement will complement each other's regional characteristics and product lineup," said Mitsubishi Motors President Osamu Masuko.

[Photos: Mitsubishi pre-production Compact Crossover teaser design sketch and proposed smart USA B segment 5-door vehicle - see related links below for more details]

Mitsubishi and Nissan form minicar partnership