Chrysler, Nissan in Talks of Building Cars, But No Equity at Stake

Chrysler and Nissan (NSANY) are reported to be in private preliminary discussions about cooperating in auto production and supply, although sources say there is no plan to take equity stakes in each other. Respective corporate spokespersons declined to comment. The two automakers have similar development cost-saving OEM deals with industry peers. The focus of the Chrysler-Nissan talks is on pickups, small cars and engines, according to the anonymous sources. Nissan is interested in Chrysler's truck expertise, while Chrysler wants to access Nissan's strength in smaller cars.

Nissan-Renault CEO Carlos Ghosn failed to reach a three-way alliance with General Motors (GM) earlier this year, but has not ruled out seeking a North American partner. Nevertheless, sources say the talks with Chrysler are smaller scale on a product-by-product level. Ordinary shares of Nissan lost 1.1% to ¥1,190 on Friday. Nissan's ADRs lost 2.5% to $21.46 on Thursday. Daimler AG (DAI), which sold 80% of Chrysler to Cerberus Capital Management over summer, lost 3.3% to $98.34.

Sources: Bloomberg, Reuters
Additional Reading: November Auto Sales Weak; Ford Surprises • Auto Loan Delinquencies Surge - WSJ

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Comments

[Ames Tiedeman:]

Chrysler has no business building any cars. They are just horrible.

2008 Jul 19 09:46 PM