Nissan, Chrysler scrap vehicle supply deal

Nissan, Chrysler scrap vehicle supply deal

Tokyo: Japan’s Nissan Motor and Chrysler of the United States have scrapped a plan to supply vehicles to each other because of the ongoing turmoil in the industry, the two companies said.

Nissan had announced last year it would provide to Chrysler a compact sedan for the South American market beginning this year and a small vehicle for global markets from 2010.

Chrysler, which has since partnered with Italy’s Fiat as part of its bankruptcy plan, had been due to supply a pickup truck to Nissan from 2011.

But the two companies decided to end the project “in light of significant changes in business conditions since the projects were announced," according to a joint statement released late on Wednesday.

The move comes after Chrysler and Fiat sealed a deal in June to create a new auto giant after the Italian maker stepped in to salvage the bankrupt US firm.

Fiat will at first hold 20% of Chrysler Group, with its equity stake rising to 35% and eventually to a majority stake as long as certain targets are achieved and US government funds are repaid.

Nissan, Japan’s third largest automaker, is 44% owned by France’s Renault. The Japanese maker is axing 20,000 jobs in an effort to recover from its first annual loss in almost a decade.