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Chrysler and Nissan Announce Additional Vehicle Collaboration15 Apr 08January's announcement of a Chrysler-Nissan tie-up on the Versa B-segment small car has been followed up with something much more substantive.
Chrysler LLC and Nissan Motor Company yesterday jointly announced that they are to collaborate on the production of two specific vehicles in a joint venture (JV) for North American and global markets. The news of this collaboration follows January's announcement that Nissan would produce a rebadged version of the Mexican-built Tiida/Versa sedan for Chrysler to sell in South America. According to the latest announcement, Nissan will build a Chrysler-styled B-segment subcompact at its Oppama (Japan) factory for Chrysler to sell in the United States and Western Europe by 2010; in return, Chrysler will build a Nissan-styled version of its light-duty Ram full-sized pick-up at the company's Saltillo (Mexico) facility, for introduction in the North American market during 2011. “Forging the right tactical partnerships is critical to the long-term success of Chrysler”, said Chrysler LLC President and Vice-Chairman Tom LaSorda. “It also builds on the Company’s inherent strengths, including the ability to respond rapidly and creatively to emerging opportunities”, he added. Nissan Executive Vice-President Carlos Tavares said that, "This latest agreement builds on Nissan’s proven track record to deliver win-win product exchanges with multiple manufacturers around the world." Neither executive would comment on what form the two vehicles will take, how much the deal will cost each company, or what volumes are expected for the two vehicles. However, in comments made to the media late yesterday, LaSorda confirmed that Chrysler is likely to move production of the light-duty Ram and perhaps even the heavy-duty version of the pick-up out of its Saltillo plant and into the St Louis North (Missouri) and Warren Truck (Michigan) plants in the United States to accommodate the required volumes in Mexico. Outlook and Implications This news is huge, and it is exactly what Chrysler needs to be doing in order to guarantee its long-term success. By arranging to have a uniquely styled, Chrysler-branded vehicle specifically for North America by 2010 with Nissan, a world leader in the manufacture of B-segment subcompacts, the company will be able to bring in what is likely to be a top-notch vehicle without having to make major investments in platform development or production facilities. On the flipside, Nissan will receive a brand-new truck developed off the 2009 Dodge Ram, which will be unique in its own right thanks to an industry-first rear coil-spring suspension, geared towards improving driving dynamics. Chrysler gets to increase production at its under-utilised North American plants, and also receives an additional boost to its lucrative pick-up truck production. The small B-segment car may be styled after the concept Dodge Hornet shown nearly two years ago; there has been no word on whether or not the Nissan pick-up slated to be built off the Ram will have a Nissan or Chrysler powertrain, but it seems unlikely that Chrysler would be willing to part with its Hemi-branded engines, while Nissan has a perfectly good truck V-8 and a plant in Decherd, Tennessee (United States) in which to build it. However, yesterday’s announcement raises two big questions: What Has Happened to Chery? Chrysler made a lot of noise about its partnership with Chinese automaker Chery Automobile, but very little has actually been shown or discussed since the original announcement. Sources close to Global Insight have suggested that Chrysler engineers have found the Chery organisation and products to be seriously below their comfort level, and that the company is nowhere near ready to design and build a small car for Chrysler for the North American market. CEO LaSorda insists that the Chery deal is still on, and that it is Chrysler's intention to have two small cars in its North American line-up as soon as Chery is deemed ready, and its products can be imported under a Chrysler nameplate. However, the deal with Nissan suggests that Chrysler may have become tired of waiting, with some impatience perhaps creeping in from owners Cerberus Capital Management, which maybe felt that a deal with Nissan was a much surer bet. What Will Happen to Nissan's Canton, Mississippi Titan Pick-Up Production? It is known that the future of Nissan's Canton plant includes a shift to begin adding commercial truck production, as announced last week (see United States: 9 April 2008: Nissan to Enter Commercial Vehicle Segments in U.S.). As part of that deal, production of the Infiniti QX56 full-size luxury sport utility vehicle (SUV) and the Nissan Quest minivan will be shipped out to Japan. That will leave only the Nissan Altima sedan and the Titan/Armada full-size pick-up and SUV produced in Canton, along with whatever commercial trucks Nissan decides to add. Now, with this announcement that Chrysler will be producing a full-size pick-up for Nissan, it is becoming uncertain whether Titan production will continue at Canton beyond 2011. Although no volumes have been provided for future output, Chrysler obviously thinks that enough models will be built to make production shifts of its own products necessary. That suggests that this vehicle will be a replacement for the Titan; if that is the case, speculation as to what will happen to the Titan-based Armada SUV will begin to arise. The Titan has not been nearly as successful as Nissan had hoped, never really resonating with American truck-buyers and selling well below the company's hoped-for 100,000-plus volumes. According to Nissan, the switch to the Dodge-based platform is partially in response to regulatory concerns; it may be that corporate average fuel economy (CAFE) or rollover standards are partly to blame for pushing Nissan into the joint venture. |
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