Daimler and Japanese textile maker Toray Industries will form a joint venture to produce and sell lightweight carbon fiber parts aimed at improving the fuel economy of cars, they said on Monday.

The announcement follows the companies' joint development agreement last April in the area of vehicle weight reduction, where competition is intensifying as a way to boost fuel efficiency in automobiles.

The new venture, to be capitalized at €825,000($1.12million) and established in March, will be held 50.1% by Toray, 44.9% by Daimler and 5.0% by others.

Toray and Daimler had said in April they would jointly develop carbon fiber car parts, to be used first in Mercedes-Benz' SL Class in 2012.