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From Bloomberg:
April 14 (Bloomberg) -- 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 today in a statement. 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 percent 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 them in the full-size pickup market without having to reinvest in a new platform,'' said Michael Robinet, an analyst at CSM Worldwide Inc. in Northville, Michigan. ``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.

Toyota's Challenge

Toyota Motor Corp., the biggest Japanese car company, followed Nissan last year by redesigning its Tundra to match U.S. rivals in size and power.

U.S. sales of the Titan have fallen 40 percent in the first three months of the year, while the overall vehicle market has dropped 8.1 percent.

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

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

Automakers in the U.S. sold almost 2.5 million full-size pickups in 2004, he said. Now the total is closer to 2 million.

Titan's Target

Since its 2003 debut, the Titan has never reached Nissan's initial goal of 100,000 units a year. Sales peaked at 86,945 in 2005.

Nissan will receive its Chrysler-built pickup in 2011 and supply the a new ``unique'' compact car to Chrysler starting in 2010, Nissan spokesman Fred Standish said in an e-mail.

Today's announcement expands a January tie-up under which Nissan will provide a version of its Versa small car to Auburn Hills, Michigan-based Chrysler for sale in South America.

The automaker has said it will seek partnerships globally to develop vehicles without making large investments in new plants.

Thormann said Nissan isn't discussing an equity relationship with Chrysler.

Chrysler has arranged to sell a variation of a Chery Automobile Co. small car in some markets. Chrysler also has been in talks with the Chinese automaker about jointly developing a new car for export, Frank Klegon, head of Chrysler's product development, said earlier today.

Mississippi Factory

Nissan last week said it plans to convert its Mississippi plant to produce light-commercial vehicles, and that it would stop making Quest minivans and QX56 luxury sport-utility vehicles at the factory.

More stringent U.S. safety regulations due in 2011 were a factor in the company's decision to team up with Chrysler instead of spending to meet the new rules, Thormann said.

Nissan's American depositary receipts fell 11 cents to $15.93 at 5:19 p.m. in Nasdaq Stock Market composite trading.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net
Last Updated: April 14, 2008 20:53 EDT