Daimler and Nissan on Thursday completed a joint venture deal to build Mercedes and Infiniti cars in Mexico, sources close to the deal have told Reuters.

The companies are expected to reveal a substantial investment to develop cars on Daimler's front-wheel-drive template and put them together at Nissan's Aguascalientes plant northeast of Guadalajara, Reuters reported.

This 50-50 joint venture will be the largest in a four-year-old cooperative relationship between the companies, The Wall Street Journal reported.

Reuters said the deal will be formally announced on Friday at 9:30 a.m. EST.

In the four-year partnership between the two companies, they have shared engines, factories and vehicle architecture for small cars and vans, according to the Reuters report.

In this deal, Infiniti -- which is made by Nissan -- will get help plugging a gap at the bottom end of its vehicle range with a new SUV, sedan and coupe. Those vehicles are expected to share parts and architecture with future Mercedes A-Class, B-Class, GLA and CLA vehicles.

Reuters reported that, in exchange, Daimler, which makes Mercedes, will get the first North American production line for its MFA vehicle architecture, as well as development savings.

"This is all about scale," Arndt Ellinghorst, an automotive analyst with ISI Group, told The Wall Street Journal. "It's about lowering costs by sharing the parts of the car that are less relevant to the consumer."

Analysts are claiming that this deal underscores the importance of Mexico to carmakers, according to the Wall Street Journal's report. The country has been growing in competitiveness, especially compared to the U.S. South.

BMW is widely expected to choose to open a plant in Mexico over continuing operations at its current plants in the southern U.S., according to the Journal.

Analysts at ISI expect the cars made at the Aguascalientes plant to be exported to the U.S. by 2017, an Automotive News report said.