Mumbai: US-based Chrysler LLC and Japan's third largest automaker Nissan Motor Co. are teaming up for a car to be sold in South America, and possibly for a broader alliance later.
Under the deal, Nissan will build a new sedan for Chrysler next year based on its compact Versa - which is also sold in some markets as the Latio or Tiida.
The deal would allow the US carmaker to sell the car in South America without the costs of building a new plant or developing a product, Chrysler LLC president Tom LaSorda said in a joint statement with Nissan. He did not disclose financial details of the deal.
The car, based on the Nissan Versa, a subcompact, would be sold under "limited distribution" beginning in 2009, the companies said in the statement.
"This partnership will give Chrysler nearly immediate access to vehicle segments in which we do not currently operate," LaSorda said.
It is the second such deal between the two companies after a 2004 agreement for a Nissan affiliate to supply Chrysler with transmissions.
The two companies, while denying an outright alliance, however, said they "agreed to maintain an open dialogue to explore further product-sharing opportunities."
Nissan has reported four straight quarters of falling profits, although chief Carlos Ghosn has predicted the company will post a rise in net profit for the full year thanks to new product launches.
Chrysler, which in turn is the third largest automaker in the United States, has been cutting thousands of jobs in a bid to stay afloat in what it called a shrinking US car market.
Last year, Chrysler ended a nine-year tie-up with Daimler, with US private equity firm Cerberus buying the ailing Detroit giant.