Nissan, Chrysler Fuse Partnership
Back in February I wrote an article titled, Wounded Chrysler Takes It On The Chin, to underscore the plight of the new Chrysler entity. A much 
smaller Chrysler is finding it tough to compete in a land of giants or at least against companies with deep pockets.
I also made the bold prediction that Chrysler would be sold within the year as owner Cerberus Capital Management would quickly move the company out of its vast portfolio. Cerberus bought Chrysler from Daimler AG in 2007, but CCM has been looking for other partners ever since. Daimler still retains a 19.9% share in Chrysler LLC.
News yesterday that Nissan and Chrysler have reached a historical production agreement comes as no surprise, at least to me. I believe Chrysler will become the third leg in the Renault-Nissan triumvirate with that third leg already taking shape as evidenced by the announcement.
The Detroit Free Press is running an article today titled, Nissan, Chrysler 
Agree To Share Products with the sub-title: Companies downplay talk of alliance, but analysts say it’s possible. Um, yeah….
Specifically, the two companies agreed on the following:
- Nissan will use one of its Japanese plants to build a Chrysler-designed small car that the company can sell in North America, Europe, and elsewhere beginning in 2010.
- Chrysler will build Nissan’s next generation full-sized Titan truck at one of its factories in Mexico. The truck will be sold in the US market.
- The new Titan will be based on the Ram frame and the new Chrysler small car will be based on a Nissan frame.
A Nissan affiliate has been selling transmissions to Chrysler since 2004 and this past January the companies reached a deal whereby Nissan would a small car based on its Versa platform to sell in Brazil beginning next year.
Cooperation between global automotive manufacturers makes sense as one way to reduce costs, consolidate production, and remain competitive. With Chinese and Indian car lines growing in importance, a Chrysler-Nissan-Renault triumvirate is definitely within reach.
April 15th, 2008 at 4:39 pm
Very interesting rumblings in the car industry! Nice coverage!
April 28th, 2008 at 12:23 am
So Chrysler will manufacture and supply large vehicles to both itself and Nissan, and Nissan will do the same with small vehicles. Wait a minute… isn’t the market trending toward smaller vehicles thanks to gas prices? In 10 years who will still be manufacturing, and who will be just a distributor? Some more on this disparity at:
http://www.evolvingexcellence.com/blog/2008/04/what-if-your-be.html
Kevin
April 28th, 2008 at 9:13 am
Kevin, I believe Nissan is admitting that the large truck category is too competitive for them to compete. By offering a truck based on the Ram platform, they can still appeal to buyers who need a full size truck. Lots of contractors including plumbers, electricians, and service people need a larger truck no matter what the gas prices end up hitting.
Chrysler, on the other hand, needs some help. I see Chrysler eventually folded into the Renault-Nissan conglomerate, probably within the next year or so.
Ten years out, global consolidation will likely mean a dozen or so companies controlling most of the major brands.