Nissan and Chrysler have reached a deal to have Nissan
supply cars to Chrysler for sale in South America starting next
year, the automakers said Friday.
The model, based on the Nissan Versa sedan, will be supplied
under what is called an OEM, or ``original equipment manufacture,''
agreement in the auto industry.
That means Japanese automaker Nissan Motor Co. will supply the
cars, which are also sold as Nissan models, to Chrysler LLC so the
U.S. automaker can sell them under its own brand.
Such OEM agreements are fairly common among automakers and should
not be confused with major alliances like the one Nissan has with
Renault SA of France. But they can help cut costs and strengthen
product offerings immediately.
Detailed terms of the agreement were not disclosed.
``This kind of tactical partnership allows us to maximize product
offerings yet minimize costly investments,'' said Chrysler president
Tom LaSorda, adding that the agreement will allow Chrysler to add a
small car in its lineup.
Nissan and Chrysler agreed to keep exploring other possible ways
to share products, they said in a joint release. A Nissan affiliate
has been supplying Chrysler with transmissions since 2004, it said.
``Nissan has a successful track record of win-win product
exchanges, and we are pleased to be entering into this second
agreement with Chrysler,'' said Carlos Tavares, Nissan executive
Chrysler, which makes the Jeep Wrangler and Dodge Charger, has
been eager to expand international sales through tie-ups, partly to
expand in emerging markets to offset declining U.S. sales.
Nissan has also flirted with the idea of a U.S. partner, to
solidify its position in North America, but its talks with U.S.
automaker General Motors Corp. in 2006 stalled.
Nissan CEO Carlos Ghosn, who also heads Renault, has said the
company is open to partnerships if they have potential to be
successful like the Renault-Nissan alliance.
Nissan, Japan's No. 3 automaker, produces the March subcompact,
Infiniti luxury models and GT-R sportscar. It turned itself around
from near-bankruptcy under the 1999 alliance with Renault.
Chrysler, which had been losing money, became a private company
in August after Cerberus Capital Management LP became the majority
owner, buying an 80.1 per cent stake from German automaker Daimler
Last year, Chrysler announced a deal with China's biggest
independent car company, Chery Automobile Co., to jointly produce
and export small cars to Western Europe and the United States.