LITTLE ROCK — Nissan Motor Co. and Chrysler Group LLC have dropped their plans to produce vehicles for each other.
The two automakers agreed early last year to pool their volumes in the full-size pickup and subcompact segments, but doubts about the projects arose after Chrysler teamed up with Italy's Fiat SpA.
"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," the two automakers said in a joint statement last week.
"Today, it was decided it was in the best interests of both companies to end the projects."
Last year, before Chrysler joined forces with Fiat, it agreed to produce a full-size pickup for Nissan, while the Japanese automaker agreed to make two subcompacts for Chrysler.
But Fiat, a small-car specialist, will provide Chrysler with smallcar underpinnings and sell at least one of its own cars, the 500, in the United States.
"Obviously, our new relationship with Fiat gives us a wide range of product and technology opportunities," Chrysler spokesman Rick Deneau said.
The bigger question is what Nissan plans to do for its next full-size Titan pickup.
Nissan is exploring all options, said spokesman Fred Standish, but has time because Chrysler was not scheduled to start producing a model based on the Dodge Ram for Nissan until 2011.
"We will stay in the market," Standish said.
Nissan sold only 34,053 Titans last year. By contrast, Chrysler sold 245,840 Dodge Rams.
Nissan's Titan received favorable reviews when it came out in late 2003, but the truck never hit its initial sales targets.
When the pickup segment began to crumble in early 2008 amid rising gas prices and slumping home sales, Nissan decided to retool the plant in Canton, Miss., where it builds the Titan, and produce smaller vehicles there. ButNissan is still rolling out Titans in Canton.
Other manufacturers, including Toyota Motor Corp., also are struggling with excess capacity for big pickups. According to Japanese news reports, Toyota may retool part of its San Antonio truck plant to build midsize Tacoma trucks there, as well as full-size Tundras.
Toyota now produces Tacomas at a plant in Mexico and at the New United Motor Manufacturing Inc. factory in California. But the prospects for California plant, a joint venture with General Motors Co., are clouded by GM's decision to quit the venture.
Chrysler remains open to the possibility of building trucks for Nissan, Deneau said.
Nissan needs a partner, said Jim Hossack at AutoPacific Inc. in Tustin, Calif. "Nissan's Titan volume is too small to justify a unique platform," he said. "I'd expect to see the current Titan's life extended as long as possible and then discontinued. The full-size pickup truck market is a tough, tough game."
He said he did not believe Ford Motor Co. or GM would work with a Japanese competitor in that segment. Unlike the passenger-car market, where the domestics have lost ground to Asian rivals, Detroit's automakers have defended the lucrative, full-size pickup segment.
Under the previous arrangement, Nissan was to have built two subcompacts for Chrysler, one to sell in South America later this year, and one next year.
A previous accord entailing the supply of Nissan transmissions to Chrysler was not affected.
Business, Pages 70 on 08/30/2009