Chrysler-Nissan Product Sharing Agreement is in Jeopardy
Chrysler’s much-ballyhooed joint ventures with Nissan, whereby Chrysler would produce a rebodied version of its Dodge Ram pickup in what would become the next-generation Nissan Titan, and Nissan would produce two small car models for Chrysler to be badged as Chryslers or Dodges has hit a snag. That snag is the global financial meltdown and the way it is having a significant adverse impact on the global automotive industry. OEMs and suppliers across the globe are encountering enormous struggles regardless of their country of origin and the countries in which they market their vehicles.
Last year, you may recall, the companies actually had two different joint venture announcements. The first one, from January 2008 and which still appears to be in force today, is that Nissan would produce a rebadged version of its Versa subcompact in Mexico for sale in South America as a Chrysler or Dodge. The second, more extensive joint venture announcement occurred in April 2008, where Nissan would build an “already designed” small car in Japan for Chrysler – supposedly not a rebadge, but a platform sharing venture. Many assumed this car to be the production version of the Dodge Hornet small car, but that was never confirmed by either company. Chrysler, in turn, would then build Nissan Titans that were the same as the Dodge Ram under the skin at its Saltillo, Mexico plant for Nissan. Chrysler was to pay Nissan for the small cars that Nissan built, and Nissan was to pay Chrysler for the pickups that it built.
With the dramatic shifts in consumer behavior, exchange rates, credit markets, and more, both companies have decided to go back to their respective drawing boards and examine their cost assumptions to determine whether the venture is financially viable in a new reality. My first thought when I read this news was that the move might be related to the Chrysler’s pending tie-up with Italy’s Fiat; after all, with Chrysler getting access to all of Fiat’s car platforms, why would it need to lean on Nissan? However, according to industry newspaper Automotive News, people at Chrysler familiar with the situation have said that the Nissan venture news is unrelated to the Fiat situation.
I’ve always been oddly fascinated by rebadged and rebodied vehicles (such as the Hyundai Accent sold by as the Dodge Attitude pictured above), so I was curious to see what Nissan’s designers would have been able to do with the Dodge Ram. A lot depends upon whether the cab and doors would stay the same in the Titan as they are in the Ram; given the way the Ram’s front fenders continue into the doors, that seems unlikely, which would make it more likely that the Nissan would truly have a unique look. You know, unlike the Suzuki Equator versus the Nissan Frontier pickups. But now with this news, it’s quite possible that there will never be a Dodge-based Titan. If that happens, since the Titan’s Tupelo, Mississiippi plant is already allocated to production of Nissan’s light commercial vehicles (ahem, full size vans), it may mean the end of the road for the Titan after its current life cycle ends. Should Chrysler survive to the end of 2009 (with or without Fiat’s help, but certainly with the US government’s help), it still is unlikely to have credible small cars to sell even in 2010. That part is not good news at all for the struggling company.