Nissan and Chrysler May Swap Product

By Brendan Moore

12.19.2007

Nissan and Chrysler have been discussing the possibility of producing vehicles for each other, but the two CEOs have not yet met regarding the possible deal. Still, the Japanese newspaper Nikkei reported that sources from both automakers say that a deal could be announced within the next few weeks.

Such a partnership would be a good deal for both companies. Nissan would love to get things like: a diesel engine for the Titan (they could piggyback on Chrysler’s diesel engine supplier deal), another pickup truck platform, maybe the Hemi engine for a model here and there, and lastly, the big enchilada, the minivan platform.

What does Chrysler need? That’s easy – everything small that Nissan makes that gets good or great fuel economy. Chrysler is desperate for such cars now, and their desperation will grow even greater when the new CAFE standards are adopted.

But any relationship between Nissan and Chrysler will inevitably become an international ménage a trios at some point, because Renault, Nissan’s current partner owns 44.3% of Nissan and not coincidentally, would also like another crack at the U.S. market it abandoned previously. Chrysler would present an excellent springboard back into a market it left so ignominiously. There is also a possibility that Renault may wish to dip into the Chrysler LLC truck platform inventory for a commercial truck or two. Renault sells vehicles in a lot of developing countries and such truck platforms might be quite useful in those markets.

There are interesting possibilities all-around when looking at a deal between Nissan and Chrysler. If I’m Bob Nardelli, the CEO at Chrysler, I love a deal like this, because I have no small cars now, no small cars in the future product-pipe, no money for development of those cars, and the price of gasoline keeps rising. A pact with Nissan solves one of Chrysler’s product problems.

If I’m Carlos Ghosn, the CEO of Renault-Nissan, I love the deal as well, but for different reasons. I get the minivan, maybe a couple of big engines, and I also get to make and sell a lot more small Nissan cars which Chrysler will buy and put their badges on, which makes those small cars that much more profitable because I’m spreading out the production costs over a larger volume. And I pry the door to the American market open for Renault.

It’s a very intriguing deal concept and it will be interesting to see how it plays out.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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6 Comments

  1. This does present a lot of interesting ways it could go. And Chrysler sure could use the help. Maybe Chrysler could get the Nissan Aprio (Renault Logan) out of Mexico and sell it as a Dodge. Dodge could probably do OK with a car like that under the Dodge nameplate. And there is no doubt they would do well with a version of the Versa.

  2. I agree, that’s a good idea and it seems a better deal then the Chrysler-Chery one or the GM-Renault-Nissan alliance then Kirk Kerkorian dreamed in 2006.

    The Nissan B-platform (Versa/Tiida, Renault Clio III, Logan) will be a good use for the smaller Dodge, the Hornet concept-car could use the platform.

    On the commercial side, the Renault Trafic & Master also known in Europe as Opel/Vauxhall Movano and Vivano in a joint-venture with GM-Europe, could also sold as Dodge trucks models and offer a smaller commercial alternative since the departure of the Chevy Astro/GMC Safari and Ford Aerostar. It could also be a successor to the Sprinter.

    Finally the small Renault diesels could also be use for the smaller cars while the upcoming V6 diesel (you can view some pictures on these French sites at
    http://www.moteurnature.com/actu/uneactu.php?news_id=1993
    http://www.leblogauto.com/2005/07/tout_nouveau_di.html will probably replace the Mercedes V6 Cdi for the 300C, Grand Cherokee and even the Charger and Challenger.

    If this scenario happens, it won’t be long then we could see at the SEMA, a Challenger concept-car with the Skyline’s Twin-turbo V6 😉

  3. Dear Carlos,

    I double-dog dare you to bring back the Renault Alliance.

    Yours truly,

    Lee Iacocca

  4. Isn’t it totally ironic that Renault owned a majority interest in American Motors until 1987, when Chrysler bought it (in order to get Jeep)?

    Perhaps if Nissan-Renault and Chryslerebrus were to go a step further and actually merge, the conglomerate company could be called American Motors Corporation (tongue in cheek).

  5. Dear Lee,

    A double-dog dare? Nobody says double-dog dare to me, old man. That’s it! I’m going to do the deal and and bring back the Renault Alliance AND the Encore (get it?) and you’ll never double-dog dare me again.

    Cordially (but not really),

    Carlos Ghosn

  6. Dear Lee –

    Just curious, when you had the deal with Renault before, did you ever have to wear one of those berets? Because I don’t think I would look too good in one of those little berets. I’m still embarassed about those photos of me in the orange apron when I was at Home Depot.

    The boys at Cerberus say not to worry, I’ll have to do karaoke with the Nissan guys way before any beret is required, and that’s what I should be worrying about. I was thinking about working on “Moon River” and as a backup, maybe “What’s New, Pussycat”.

    Any ideas?

    Sincerely,

    Bob Nardelli

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