Chrysler-Nissan junk agreements in the 'best interests of both companies'

Nissan North America and Chrysler have scrapped three agreements signed last year under which Nissan was to produce some small cars for Chrysler to sell in South America and other global markets and Chrysler would have provided the next generation of Nissan's Titan full-size pick up.

The decision had been widely expected with Chrysler entering chapter 11 bankruptcy reorganisation in the spring and virtually emerging as a virtually subsidiary of Italy's Fiat which plans to supply Chrysler with its own small cars.

In a joint statement the companies said that ''it was decided in the best interests of both companies to end the projects.''

Analysts say the subcompact cars Nissan was to provide Chrysler could not have been produced at the company's US plants and these facilities have not lost anything with the cancellation of the deals.

However, the cancellation of Chrysler's plans will hit Nissan which was banking on Chrysler's reworked version of Dodge Ram pickup to replace the Titan. The Japanese auto major had said it would end production of the current Titan at the Canton plant after next year and begin selling the reversioned Ram in 2011.
Nissan had sealed the deal with Chrysler to continue offering a full-size pickup through Chrysler's US dealer network without incurring millions of dollars in development costs on a new generation of the slow-selling Titan.

Though speculation over Nissan's plans for the Titan are rife in industry circles, according to one analyst, Nissan would probably continue to build the Titan in house and not abandon the full-size pickup market as is being said in some quarters.