Nissan and Chrysler May Swap Product
By Brendan Moore
Nissan and Chrysler have been discussing the possibility of producing vehicles for each other, but the two CEOs have not yet met regarding the possible deal. Still, the Japanese newspaper Nikkei reported that sources from both automakers say that a deal could be announced within the next few weeks.
Such a partnership would be a good deal for both companies. Nissan would love to get things like: a diesel engine for the Titan (they could piggyback on Chrysler’s diesel engine supplier deal), another pickup truck platform, maybe the Hemi engine for a model here and there, and lastly, the big enchilada, the minivan platform.
What does Chrysler need? That’s easy – everything small that Nissan makes that gets good or great fuel economy. Chrysler is desperate for such cars now, and their desperation will grow even greater when the new CAFE standards are adopted.
But any relationship between Nissan and Chrysler will inevitably become an international ménage a trios at some point, because Renault, Nissan’s current partner owns 44.3% of Nissan and not coincidentally, would also like another crack at the U.S. market it abandoned previously. Chrysler would present an excellent springboard back into a market it left so ignominiously. There is also a possibility that Renault may wish to dip into the Chrysler LLC truck platform inventory for a commercial truck or two. Renault sells vehicles in a lot of developing countries and such truck platforms might be quite useful in those markets.
There are interesting possibilities all-around when looking at a deal between Nissan and Chrysler. If I’m Bob Nardelli, the CEO at Chrysler, I love a deal like this, because I have no small cars now, no small cars in the future product-pipe, no money for development of those cars, and the price of gasoline keeps rising. A pact with Nissan solves one of Chrysler’s product problems.
If I’m Carlos Ghosn, the CEO of Renault-Nissan, I love the deal as well, but for different reasons. I get the minivan, maybe a couple of big engines, and I also get to make and sell a lot more small Nissan cars which Chrysler will buy and put their badges on, which makes those small cars that much more profitable because I’m spreading out the production costs over a larger volume. And I pry the door to the American market open for Renault.
It’s a very intriguing deal concept and it will be interesting to see how it plays out.
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