Chrysler and Nissan

[telcoman]

I hope not! They ruined Mercedes and are now looking at Nissan?

DOW JONES REPRINTS

Chrysler, Nissan in Talks To Team Up on Key CarsBy NEAL E. BOUDETTEAugust 7, 2008; Page A1

DETROIT -- Chrysler LLC is in talks with Nissan Motor Co. about jointly producing midsize cars, a partnership that would move the U.S. auto maker toward a radical new business model.

The two companies agreed earlier this year to team up on pickup trucks and subcompact cars. Since then, they have been discussing an agreement under which Nissan would produce midsize sedans that Chrysler would sell in the U.S. under its own name, people familiar with the matter say.

A Chrysler spokesman said the company has "no new alliances" to announce, and declined to comment on any discussions it might be having.

A deal would signal a dramatic change in the way Chrysler operates, at least in its passenger-car business. For decades, major auto makers have taken pride in marketing their vehicles as products of their own engineering. Chrysler plans to continue developing new trucks, sport-utility vehicles and minivans itself, from the ground up.

A partnership with Nissan on midsize sedans would put Chrysler on a path to becoming a marketer and seller of cars made by others. Under its earlier agreement with Nissan, which is based in Japan, Chrysler will start selling a subcompact car made by Nissan by about 2011. Chrysler also has a deal under which China's Chery Automobile Co. will make small cars for it.

This outsourcing approach has worked for computer makers such as Dell Inc., which relies on key suppliers to develop major components, and does limited engineering itself. For certain products like laptops, Dell has contract manufacturers assemble the computers.

For the auto industry, using such a model on a wide scale could prove risky. Sophisticated car buyers who are aware that Nissan is manufacturing sedans for Chrysler might simply buy Nissan's version of the car. Success of such deals "comes down to marketing and branding," says Michael Ward, an automotive analyst at Soleil Securities Group.

Some auto makers have tried the approach in the past, mainly for low-volume niche vehicles. General Motors Corp. and Toyota Motor Corp make small hatchbacks together in a plant in California, Mr. Ward notes. But Toyota's model, the Matrix, sells in greater volume and at higher prices than the GM version, which is marketed as a Pontiac Vibe.

A few years ago, GM struck a deal with Subaru, at the time its partner, to make a small car that GM modified slightly and sold under its Saab brand. The car flopped and was pulled from the market.

Outsourcing the engineering and development of cars could offer one big advantage for Chrysler and its majority shareholder, Cerberus Capital Management LP: It could save Chrysler the billions of dollars it costs to develop a full line of vehicles in-house.

That could help bring the company back to profitability, even though its vehicle sales are declining. Getting Chrysler to generate positive cash flow is a key priority for Cerberus, which acquired an 80.1% stake in the auto maker a year ago.

Cerberus's foray into the auto industry has been hampered by a deep downturn in U.S. vehicle sales, along with a sudden shift in consumer preferences to small cars and away from trucks and SUVs. Those trends have hurt Chrysler, whose line of about 30 models includes just one compact car. Its sales have fallen about 25% this year.

Chrysler is focusing its engineering resources on parts of the market where it is a strong player -- mainly trucks, SUVs and minivans, says one person familiar with the company's strategy. "We're still in engineering," this person says. Working with partners on other models saves money and allows the company to add models that would be costly to produce by itself, this person says.

In an interview last week, Chrysler Vice Chairman Jim Press said the company is working hard to understand precisely what American consumers want in midsize sedans. The effort, known internally as Project D, "is a totally customer- and market-focused project," he said.

People familiar with the specifics of Project D say the team has been in touch with Nissan and is evaluating whether it makes financial sense to partner with the company.

In addition to its earlier deals with Nissan and Chery Automobile, Chrysler has formed a group, called ENVI, that is responsible for finding partners that can help Chrysler bring out hybrids and fuel-efficient vehicles.

Chrysler is currently trying to decide how to add a new midsize sedan to its lineup, people familiar with the matter say. Nissan is working on a redesign of its well-received Altima sedan. The talks have centered on having Nissan produce a version of that car for Chrysler, these people say.

It's still possible that Chrysler will decide to develop a new sedan on its own, or to work with a partner other than Nissan, these people say. Chrysler currently offers two sedans -- the Chrysler Sebring and Dodge Avenger. But sales of those models have fallen far short of expectations.

Chief Executive Robert Nardelli and Mr. Press, the vice chairman, are convinced Chrysler must become competitive in the sedan segment because midsize cars represent a huge chunk of the U.S. market.

Toyota and Honda Motor Co. have the top-selling sedans in the Toyota Camry and Honda Accord. Broad awareness of those models brings hordes of car buyers into their dealerships.

Write to Neal E. Boudette at [email protected]

Telcoman

[joe603]

Why cant that company just die...

[rn79870]

I can't understand why Nissan would consider a venture with Chrysler. What does Chrysler offer other than a slew of 4th rate dealerships and a 5th. rate cars.

Come on Nissan, If a Mustang GTR would be a better merge. Wait, did I say Mustang GTR? Wow, would that be the king of the road or what.

PS thanks Beanor for all the thumbs icons. How about one using something other than the "thumb."

[G_whizz]

Why cant that company just die...

Ok, if this happens, the only positive thing is that at least it will be Nissans under a Chrysler name sold at Chrysler dealerships and not the other way around.

[joe603]

Hopefully it wont be like the Dodge/Mitsubishi crap of the 90's. Gotta love the Stealth/3000GT and Talon/Eclipse cars...

[TeflonG35]

I thought it was a trade off for Nissan using Chrysler's trucks?

(this may have been stated in the article, I'm tired and just skimmed the original post)

[Jacko3]

There is nothing unusual about this deal from a business stand point. Of course, Nissan purists will say otherwise.

Nissan once produced the engines of one of Ford's minivans (i am not sure but i think it was the Ford Aerostar). So, this won't be the first time Nissan is doing something of this nature. Besides, it will help Nissans bottom line, as the money generated will help them build better cars for the 21st century.

In exchange for this deal, Nissan wants Chrysler-Dodge to build its trucks. Nissan has never been a truck company, and it probabaly will never be one. So, according to the theory of comparative advantage it is best to let your peer produce for you what it can produce more efficiently and cheaply, and vice versa. So, Nissan knows how to build small cars, and Chrysler-Dodge knows how to build trucks. So, both are taking advantage of each other's competencies.

I support Carlos Ghosn in this effort, as I continue to support his thinking with the development of the GT-R and the HEV/EV vehicles as well.

Oh, don't forget Carlos Ghosnh's aka----Le cost Killer---hence the insane cheapness of the technolgically loaded GTR. When next you neet him, just say, "Le Cost Killer"--- he will smile and you might probably get a chance to have a photo-op with him.


Modified by Jacko3 at 8:20 AM 8/7/2008

[TeflonG35]

I wonder if this will make it cheaper to get a car with a VQ35?.... Would probably be gay and be FWD.

[CRIPES]

Why cant that company just die...

HERE HERE!!!

i'll be going where the japaneese are japaneese even if that means honda, so if they do take over the last car i'll be looking at in nissan's line up will be the early G35's......

[TeflonG35]

Yuck....Honda.

[etschell]

you can get an srt6 crossfire with like 20k for about 17 grand

[CRIPES]

Yuck....Honda.

how about yuk....i drive a chrysler now.... sounds much worse than a honda.

that **** pisses me off!

[TeflonG35]

I don't see it. The avenger dosen't look bad. Rams are sexy. I'd rock an Avenger over a honda. If I had to settle for a FWD car that is.

[CRIPES]

I don't see it. The avenger dosen't look bad. Rams are sexy. I'd rock an Avenger over a honda. If I had to settle for a FWD car that is.

ok

[Sentientbydesign]

I don't see it. The avenger dosen't look bad. Rams are sexy. I'd rock an Avenger over a honda. If I had to settle for a FWD car that is.

You FAIL!!!

I was talking to somebody "in the know" about Nissans and Infinitis and they said that the V8 for the QX56/Pathfinder...etc was one of the worst. The "insider" has seen quite a few with cracked heads among other things.

Isn't it funny that that engine is built here in the US?

[MagicM]

You FAIL!!!

I was talking to somebody "in the know" about Nissans and Infinitis and they said that the V8 for the QX56/Pathfinder...etc was one of the worst. The "insider" has seen quite a few with cracked heads among other things.

Isn't it funny that that engine is built here in the US?

Well you know the QX56/Armada engine is American because it's huge and makes no horsepower, and runs out of steam past the idle point . As for the Pathfinder the 4.0 Liter is the way to go still a VQ engine at heart.Nissan needs to learn how to make trucks from Toyota, Love the new Tundra, 5.7 Liter 381 Horsepower/401 Lb/ft torque, and they got the Land Cruiser.

[Tampa G35 Sedan 6MT]

1+ for the yotas...

The really do know how to make them!

It is the best truck on the road.. also has the best V8 and Fastest 0-60 6.0 sec... That is very fast for a 5000lb + truck!

Also the best trans... 6speeds

DJ

[awdjdmtalon]

Chrysler was for sale a few years ago for like 3 million dollars. But you had to assume the 20 billion in debt they had. That is why Merc-Benz got out of them.

VW has gotten in bed w/ them. Chrysler gets VW's ultra clean diesle eng, and VW gets F***ed w/ their mini van.

So basicly Chrysler is trying to get anyone they can to help bail them out.

[DevonD]

Chrysler is going to be building the new Titan on the Ram's platform. The new ram is getting a smaller diesel from Cummins and the Titan is going to get it too. And from what I have heard Nissan could be dropping the Endurance 5.6 V8 and getting the 5.7 Hemi. I have driven the ram and durango's with the 5.7 and I wasn't overly impressed. I thought it was weak compared to the 5.7 in the Toyota tundra...for a truck that thing is a ROCKET!!

I really hope the Titan wont have the same build quality as the Ram 1500 . If you guys didn't already know this the 1500, 2500, etc in the dodge truck line up does not only differentiate the truck models but also specifies how many tin cans went into the truck's construction!

[SVTCOBRA]

You FAIL!!!

that was subtle....don't hold back now Nate!

[C-Kwik]

I was talking to somebody "in the know" about Nissans and Infinitis and they said that the V8 for the QX56/Pathfinder...etc was one of the worst. The "insider" has seen quite a few with cracked heads among other things.

Isn't it funny that that engine is built here in the US?

Sounds rather isolated considering the heads aren't among highly reported issues among titan owners. The early front brake designs and rear diffs top the complaints lists but those aren't engine related.

I think the Tundra's V-8's are built here as well. Though, the Tundra may be facing a recall on their some of their camshafts, which IS making big news.

On the other hand, one article still indicates the Titan is still quite relevant:

http://www.popularmechanics.co...age=1

Of big interest is the loaded acceleration test. The Titan came in just behind the Tundra in the 1/4 mile.

Well you know the QX56/Armada engine is American because it's huge and makes no horsepower, and runs out of steam past the idle point . As for the Pathfinder the 4.0 Liter is the way to go still a VQ engine at heart.Nissan needs to learn how to make trucks from Toyota, Love the new Tundra, 5.7 Liter 381 Horsepower/401 Lb/ft torque, and they got the Land Cruiser.

While it is underpowered compared to current offerings, it was one of the top motors when it released. The newest Titan is merely an extension of the original with minor changes so it would be hard to expect a 4 year old motor to be able to compete with the newest top motor in its class. However, in 04, the Titan beat out every other half-ton in almost every comparison. Here's a few you can read over:

http://www.edmunds.com/insidel...58897

http://www.caranddriver.com/re....html

http://www.popularmechanics.co....html

But if you want to talk about how Nissan needs to learn to make trucks from Toyota, watch this:

http://www.youtube.com/watch?v...earch

As for Nissan going to Chrysler for their trucks, its not a bad business move. With the current state of the truck market and Chrysler's much more mature truck manufacturing abilities, I think its a great way to try and stay in the full-sized truck market. Not sure I'd buy one, but the business move seems sound. I will be sad if they drop their Endurance V-8. Its a great motor. Hopefully their ideas for utility don't diminish. The Utilitrack system is one of the best things I've seen on any truck. I've purchased 3 motorcycles this year and picked each one up with the Titan. Each time, the seller was impressed with the tracks as tying down the bikes were very secure due to the more versatile tie-down positions.