Nissan and Chrysler Cancel Plans to share Cars and Trucks

By Brendan Moore

08.27.2009

chrysler-logo-smallLast year (which now seems like a hundred years ago in the car business), Chrysler and Nissan announced plans to share a couple of platforms and for Chrysler to build the next Nissan Titan, and for Nissan to build a small car for Chrysler to sell overseas. In addition, Nissan would provide the Nissan Versa for Chrysler to sell in South America.

But, a great deal has happened since then, including Chrysler going bankrupt, and, merging with Fiat, a company that has a considerable amount of good small cars in its roster.

Everyone was wondering when the other shoe would drop, and that happened yesterday, with Nissan and Chrysler issuing a joint statement to the press that said, “It was decided it was in the best interests of both companies to end the projects.

Belaboring the obvious, Chrysler no longer needs a supplier of small cars. The new corporate parent, Fiat, has plenty of those small cars.

Nissan’s need for a new Titan, their full-size pickup, has not changed. Not only does Nissan need a new Titan, they need one that is improved over the current model, and will actually put up some good sales numbers at a profit. That need just became more pronounced as their would-be supplier is now gone.

Nissan has two options for a new Titan at this point:nissan-logo-small

Find another company that will supply a competitive full-size pickup for the 2012 model year; one that Nissan can re-badge as their own, or,

Start right now on a new Titan in-house and do it on a hurry-up basis for the 2012 model year.

Nissan, of course, always has the option of abandoning the full-size pickup segment, but that is highly unlikely. They also have the option of simply extending the life of the current Titan model with a freshening, but, that is not considering a good alternative by anyone, and could do a great deal of harm to the model.

So, Nissan must scramble to come up with a plan for their full-size pickup model now that Chrysler has pulled back from their product-sharing agreement, whereas Chrysler can just relax – their needs are taken care of in the small car arena.

Yesterday’s joint release from Nissan and Chrysler:

PRESS RELEASE: The following is a joint statement from Nissan and Chrysler

Nissan and Chrysler today announced a mutual agreement to end three OEM vehicle-supply projects announced last year.

For the past several months, teams from both companies have been studying the viability of the projects in light of significant changes in business conditions since the projects were announced in January and April of 2008.

Today, it was decided it was in the best interests of both companies to end the projects.

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.

A separate agreement involving the supply of transmissions from Nissan affiliate JATCO to Chrysler remains unchanged. That agreement has been in effect since 2004.

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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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1 Comment

  1. This puts Nissan in a bad spot with the Titan. They were really counting on not having to think about the Titan for a few years and just let it do whatever it could do as a rebadge.

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