TOKYO -- Nissan and Chrysler are in talks to produce vehicles for each other, but Nissan CEO Carlos Ghosn has not directly conferred with Chrysler LLC CEO Robert Nardelli, says an industry source familiar with the talks.
The source says the two sides have not decided whether to do the deal. But a decision could come in a matter of weeks, the source says.
For Chrysler, working with Nissan would give it badly needed access to small, fuel-efficient cars, a segment where the Detroit automaker lags. Nissan, meanwhile, could tap Chrysler's strength in minivans and pickups, a soft spot in its lineup.
"Every manufacturer has strengths and weaknesses," the source said. "This allows you to get into new segments at a much lower cost than you could by doing it on your own."
One scenario sees the companies providing cars or trucks to each other that will be rebadged, the source says. The automakers also are examining a deal to share components.
Nissan Motor Co. officially declined comment on whether it is in talks with Chrysler.
But Nissan in Japan has similar arrangements with other automakers. It buys and rebadges commercial vehicles from Mazda and Isuzu and minicars from Mitsubishi and Suzuki. In reverse, it sells commercial vehicles to Isuzu and minivans to Suzuki.
In 2008, Nissan will build a mid-sized pickup for Suzuki at Nissan's factory in Smyrna, Tenn. The pickup will be based on the Nissan Frontier.
Under the new ownership of Cerberus Capital Management, Chrysler is looking for outside alliances to reduce product development costs. It already has a deal with China's Chery Automobile Co. to produce small cars for world markets, including the United States. A car for U.S. dealerships is due in 2009.
Nardelli has said Chrysler will lose $1.6 billion this year. He also has slashed four vehicles from the future lineup and laid off thousands of workers.
Meanwhile, Nissan and its French partner Renault SA are still open to a three-way tie-up with an American manufacturer following last year's breakdown in talks with General Motors.
Discussions between Nissan and Chrysler have more modest ambitions, though. If they develop, the source says, they would likely focus on product-specific cooperation.
