Automobile Magazine is reporting that Daimler chairman Dieter Zetsche and his engineering chief Thomas Weber have finally struck a deal with Renault-Nissan to develop the next generation of Smart microcars by late 2014. The vehicle will be re-badged for all three car makers, so only the exterior and possibly interior will have different shapes and colors, but the frame and mechanical parts will be identical.

Electric propulsion is to play a major role from the outset. Renault will be bring its Z.E. (zero emissions) vehicle know-how, as will smart with it’s smart ed vehicle, which will be launching in numerous countries in the new few years. They will also develop a gasoline powered version, with a 1.0 liter, direct injection, turbocharged 3 cylinder engine; a 1.3 and 1.5 liter 4 cylinder is also planned.

The plan includes as many as four models: the two-seater ForTwo city coupe and cabriolet, the all-new four-seater ForFour, and the still tentative ForMore microvan.