Mitsubishi Motors will make a new pickup for Fiat as part of a new deal to increase the Italian automaker's commercial vehicle sales and raise output at the company's plant in Thailand.

The companies will join forces to develop and manufacture the pickup, which would be supplied by Mitsubishi and is based on its best-selling model, the L200, according to a non-binding memorandum of understanding announced on Friday.

Mitsubishi's L200 pickup competes for sales against models like Toyota's Hilux, Nissan's Navara and similar-sized pickups from Ford, Isuzu, Mazda and Volkswagen.

The mid-size truck is one of five new light commercial vehicles Fiat plans to deliver as part of its goal to increase the division's sales by 40 percent to approximately 600,000 cars in four years, according to Reuters.

The pickup truck should help increase Fiat shares in the Latin America market and help turnaround its loss-making business in Europe, the Middle East and Africa. It will probably do little to help the automaker's presence in Asia however, which remains its main weak spot.

The deal will help the Japanese automaker maintain production levels at its plant in Thailand, where the automaker is facing a drop in sales and production due to a political crisis and declining demand for vehicles.

"The Fiat Professional unit is likely already making better margins than the average for the Fiat group and if the two companies share development and production costs, this should help that further," said a Milan-based analyst said who asked not to be named, according to Reuters.

Mitsubishi, which is Japan's sixth-biggest automaker, will start manufacturing a re-designed L200, also known as Triton, at its Thailand plant before the end of 2014.

By early 2016, production for the Fiat-dedicated line of the L200 will begin, which will be rebadged and sold under the Fiat brand, said Mitsubishi spokesman Tetsuji Inoue, according to Reuters.

"This is beneficial for both companies because Mitsubishi Motors will boost production and Fiat will strengthen its product lineup," Inoue said.

Inoue added that Mitsubishi will supply Fiat with 150,000-170,000 trucks over six years.

Fiat is currently busy finalizing a merger with its U.S. unit Chrysler. The combined Fiat Chrysler Automobiles company is expected to list in New York during the middle of next month.

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