Chrysler trades big truck for Nissan's subcompact

Chrysler and Nissan announced a partnership Monday to build vehicles for each other in what may mark the start of a new wave of similar get-togethers amid falling sales in the auto industry.

Chrysler will build Nissan's next generation of full-size pickups at a plant in Mexico. The truck will replace the Titan, made at Nissan's Canton, Miss., plant, starting in 2011, the two companies said.

Nissan will make in Japan a new "fuel-efficient small car" for Chrysler to sell in the USA and around the world starting in 2010. Chrysler currently does not have an entry in the subcompact segment. The two had said in January that Nissan would supply a version of its subcompact Versa for Chrysler to sell in South America starting in 2009.

The two companies, in back-to-back conference calls, emphasized that their arrangement was strictly about manufacturing, not a financial or management combination.

But some experts say they wouldn't be surprised if the two companies are laying the groundwork for something more permanent, given Chrysler's strength in trucks and SUVs and Nissan's reputation for reliable small cars.

"That potential marriage, if they are indeed dating, makes a lot more sense than Daimler and Chrysler did," says Argus Research analyst Kevin Tynan, referring to the failed merger between the German parent of Mercedes-Benz and Detroit's third-largest automaker.

Chrysler could use the help. Sales fell 15.5% during the first three months of the year, while Nissan was down only 3.3%.

Nissan CEO Carlos Ghosn has put out feelers for partners in recent years, including General Motors two years ago. The deal "is extending the range of both companies," says Dominique Thormann, senior vice president of Nissan North America. Chrysler's Tom LaSorda, in turn, hailed Nissan's "proven track record in these win-win product exchanges."

Among facets of the deal:

•SUVs. Nissan says its Armada full-size SUV, built on the same chassis as the Titan, will be unaffected for now. But the company is not saying whether there will be another generation of the vehicle.

•Plants. Nissan's plant in Canton will start building midsize commercial trucks. Though the new Nissan pickup will be built in Saltillo, Mexico, Chrysler may shift more of its own production to Warren, Mich., and St. Louis.

•Chinese cars. Nissan's building of a new small car won't preclude Chrysler from continuing to explore whether to import a Chinese-made small car under an agreement with China's Chery.

"At some point, we need more than one small car" for the U.S.-Canada-Mexico market, LaSorda says.

Neither company would give hints about the design of the pickup or small car. Both said they will be their own designs on the other company's underpinnings.

Such deals are picking up steam: At the Chicago Auto Show, Volkswagen unveiled a minivan that is being built for it by Chrysler.

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