Chrysler and Nissan Cancel Product Sharing Agreements – What’s Next?

By Chris Haak

08.27.2009

08_titanYesterday, the news came out that the flurry of rebadged/rebodied vehicles that Chrysler and Nissan were hoping to sell for each other have all been cancelled.  We reported this past February that the agreements were in jeopardy (as Chrysler was receiving money from the US government, pre-bankruptcy).  Now, “in jeopardy” has turned into “is dead.”

This means that the announcement from January 2008 – that Chrysler would sell a version of the Nissan Versa/Tiida in South America is off the table, and the more-extensive product-sharing announcement from April 2008 – that Chrysler would sell a Nissan-built “already designed” small car (rumored to have been the Dodge Hornet) and that Nissan would sell a Chrysler-built Nissan Titan.  The 2011 Chrysler-built Titan was to have had its own unique sheetmetal, interior, and driving characteristics, but I couldn’t help but think of the Chrysler Town & Country’s conversion into the Volkswagen Routan when thinking of “unique sheetmetal, interior, and driving characteristics.”  I guess we’ll never know now.

So why did both companies walk away from these deals?

A lot has happened in the auto industry since these deals were inked in the early part of 2008.  The economy collapsed, auto sales collapsed even more, Chrysler declared bankruptcy, truck sales went down the drain, and Chrysler is now controlled by Italy’s Fiat.  Chrysler had been desperate for small cars to sell, and didn’t have the resources to develop their own cars, so enlisting a car specialist like Nissan-Renault made sense at the time.  Now, however, Chrysler has access to Fiat’s technology and armada of small cars, so it doesn’t need Nissan to build a small car for it to sell in the US.  And since Fiat has a strong presence in South America, there’s no need for Chrysler to sell a rebadged Nissan Tiida there that would only compete with Fiat’s offerings in the Southern Hemisphere.

Meanwhile, the sales collapse in the full-size pickup market has weaker players, like Nissan, barely hanging on.  Nissan sold just 10,721 Titans so far in 2009, and 34,053 during all of 2008.  At the time of the Titan’s launch for the 2004 model year, Nissan was hoping to sell 100,000 of them annually, but never reached that number, and now is nowhere close.  My guess is that the projected volumes for the all-new truck just didn’t make sense from a volume standpoint (though they’d probably sell more Rams called “Titan” than Suzuki sells Frontiers called “Equator”).

And what’s next for these two companies?

Chrysler is now just a little over a year from producing several of Fiat’s excellent small cars in North America, with the cute-but-very-small 500 leading the charge.  Other Fiat Group models such as the Alfa Romeo MiTo, as well as some slightly-larger cars are likely to also make the trek across the Atlantic.  If all goes according to plan (ha ha!), 18-24 months from now, Chrysler’s surviving dealers should be awash in all the small cars they want to sell.

Nissan is busy converting the Canton, Mississippi plant that currently builds the Titan, Armada, and Infiniti QX56 to a factory that builds full-size van-like light commercial vehicles.  The outsourcing of Titan production to Chrysler was to have freed up capacity for the LCVs, which means that the Titan currently doesn’t have a home after 2011, and therefore will probably be discontinued.  Nissan could also seek to outsource Titan production to another company, but there are only three other companies that build full-size pickups GM, Ford, and Toyota – and none of the three seem to have the need to do something like a Titan rebadge.  There’s also the possibility that Nissan could find another place to build the Titan and keep it in production indefinitely, or that it could rush through its own much-needed redesign of the truck.  Without knowing how flexibile the remodeled Canton plant is, I have no way of knowing if it will be able to continue to build Titans alongside the similarly-sized LCVs, but again, is 20,000 to 25,000 heavily incentivized truck sales per year worth it to Nissan?

It’s too bad that we won’t be seeing the Nissan-badged Dodge Ram.  While I’m not a fan of rebadged vehicles and their implicit insult to consumers (no, really, it’s a Honda Passport, not an Isuzu Rodeo), I also have something of a morbid curiousity about them.  Meanwhile, management at Nissan are surely scratching their collective heads to figure out what to do about the Titan.  The 2011 model year is just 12 months away, and the 2011 calendar year is less than 16 months away.  Chrysler can probably make up for the lost Titan production by slightly increasing its incentive spend on the Ram if it were so inclined, so I don’t see this news as having much of an impact at all on Chrysler.

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Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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6 Comments

  1. I am under the impression that the deal in South America is still on.

    Too bad Nissan couldn’t do a deal with Toyota for a Tundra clone. That would take care of Nissan’s large pickup needs and you know Toyoa’s got plenty of Tundra production capacity they’re not using. But that wouldn’t happen because of their history of rivalry.

    Nissan should have gotten a piece of Chrysler or GM when they had the chance. Too bad Mahindra doesn’t make something bigger or maybe they could have modified that.

    I don’t know, I think they’re just going to have to redo the Titan, even if it’s delayed. Or just drop it if they don’t think there are enough sales for them in that segment.

  2. Although they don’t have the need currently to do a Nissan rebadge. However for a mid-term plan and to keep the plants devoted to truck rolling to its capacity, they could check a 2nd eye on this.

    Let’s imagine what if Nissan approches GM, currently their European vans Nissan Primestar-Interstar are rebadged models of the results of the joint-venture between GM-Europe with the Opel/Vauxhall Movano-Vivaro and Renault Master/Trafic. http://en.wikipedia.org/wiki/Renault_Trafic (and the irony was Renault-Nissan tried to approach GM to do a alliance leading to a “supergroup” carmaker 3 years ago), so I might not be surprised to see if a rebadged Silverdo-Titan might see the light of the day. Maybe GM current CEO Fritz Henderson might see this as an opportunity to keep some GM pick-up plants rolling closer to maximun capacity (and Alan Mullaly at Ford could think of the same thing and Ford had once a joint-venture with Nissan in the past with the Nissan Quest-Mercury Villager)

  3. Dante, the South America project is also cancelled. From the joint press release, refer to #1 (link here: http://media.chrysler.com/newsrelease.do?id=9014&mid=1):

    The projects had involved:

    1. Nissan providing to Chrysler a compact sedan for the South American market beginning this year.
    2. Nissan providing to Chrysler a small vehicle for global markets beginning in 2010.
    3. Chrysler providing to Nissan a full-size pickup truck starting in 2011.

  4. What’s next is Nissan trying to figure out what the hell they’re going to do with their full-size half ton that has always been a weak entrant in the segment, and probably will be again even after they sink a bunch of money in it. If they can’t get GM or Ford to make one for them, they should just admit they got their ass kicked in the half ton segment and walk away from it before they waste any more money there.

  5. its hard to beeleive that nissan wood just wal away from the model

  6. I do not see point in Nissan continuing making Titan. It is as if asking Chrysler to continue Avenger production indefinitely. If car does not sell – it does not sell – has to be dropped. Whats the point for Ford or GM to make rebadge for Nissan? It will work against their efforts to change image from gas-guzzler to green’n’smiley car companies. Then it will hurt respective models in sale. Neigther Ford or GM need small cars from Nissan. They actually make better small cars than Nissan (in Europe at least).

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