Chrysler to Build Pickup for Nissan

Light & Medium Truck, Jun 2008

Chrysler LLC, the third-largest U.S. carmaker, will supply large pickup trucks to Nissan Motor Co. in exchange for a compact car as the companies seek to curb costs for developing new vehicles.

Chrysler will make the pickup for Nissan at its factory in Saltillo, Mexico, the companies said in a statement.

The pickup will be the next generation Titan, said Joseph Castelli, vice president of Nissan's light commercial vehicle division.

Nissan announced in March that it would enter the U.S. light commercial market with three vehicles.

Nissan, Japan's third-largest automaker, will build the car domestically, while Chrysler sells it in North America.

The agreement follows Nissan Chief Executive Officer Carlos Ghosn's failure to compete successfully against Chrysler, General Motors Corp. and Ford Motor Co. with its own truck.

Chrysler, which gets about 75% of its sales from light trucks, needs a small car to offer to consumers as U.S. gasoline prices top $3 a gallon for a fourth year.

From Nissan's perspective, it keeps the company in the fullsize pickup market without having to reinvest in a new platform, said Michael Robinet, an analyst at CSM Worldwide Inc. in Northville, Mich. "Chrysler needed to make some moves to fill up the bottom of their portfolio."

Nissan began selling the Mississippi-built Titan five years ago, touting it as the first Japanese pickup as big and powerful as those from U.S. automakers.

U.S. sales of the Titan fell 40% in the first three months of the year compared with the same period in 2007, while the overall vehicle market dropped 8.1%.

The U.S. market for full-size pickups "has recorded a decline since we launched Titan in 2003," said Dominique Thormann, Nissan's North American senior vice president for administration and finance.

Thormann declined to say whether the Tokyo-based company would keep the Titan name. Nissan will keep building Titans at its Canton, Miss., plant through 2010, he said.

Automakers in the United States sold almost 2.5 million full-size pickups in 2004, he said. Now the total is closer to 2 million. - Bloomberg News