The Wall Street Journal-20080111-Chrysler Nears Deal With Nissan
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Chrysler Nears Deal With Nissan
Chrysler LLC and Nissan Motor Co. are close to reaching an agreement on producing a compact car the U.S. auto maker will sell in South America, said people familiar with the matter.
The talks are part of wider discussions on possible areas of cooperation, although those discussions are at earlier stages, these people said. They include the idea of having Chrysler build pickup trucks for Nissan, these people said. A Chrysler spokeswoman declined to comment.
The auto makers have been looking for help as they deal with major shifts in the global auto market. Chrysler, under new controlling shareholder Cerberus Capital Management LP, has been looking to shift to small, more fuel-efficient cars and away from big trucks and sport- utility vehicles. Nissan, which has a stable of small cars, has been looking for a partner to share costs, keep plants running at higher capacities and increase its global footprint.
Under the talks involving South America, Nissan would produce a version of its Versa compact car in Mexico that Chrysler would sell under its own brand in those countries, one person familiar with the details of the talks said. The deal is relatively small, calling for Nissan to produce about 20,000 cars a year for Chrysler. Chrysler sold about 2.6 million cars in 2007.
The smallest of Detroit's Big Three has been hurt by high gas prices because it has few high-mileage vehicles in its lineup. About three- quarters of its vehicle sales come from pickup trucks, sport-utility vehicles and minivans. It already has an agreement to sell a subcompact car in the U.S. and elsewhere that will be made by China's Chery Automobile Co.
Nissan is also trying to boost profitability.
