Nissan Motor Co. said it will make a new small car designed by Chrysler LLC and Chrysler will make a full-size pickup truck designed by Nissan.
The agreement is part of a growing relationship between Chrysler and the No. 3 Japanese automaker as they attempt to adapt to a U.S. market buffeted by the economic slowdown and rising gas prices.
Both products will be sold in North America, and the new Chrysler subcompact will also be sold in Europe and other global markets starting in 2010. No financial details were disclosed.
The new Chrysler small car will be made at Nissan’s Oppama plant in Japan. Chrysler will make the pickup truck at its plant in Saltillo, Mexico, and it will go on sale in 2011, the companies said.
The Nissan Titan, Nissan’s current full-size pickup, will remain on the market until the new pickup goes on sale, said Dominique Thormann, senior vice president for administration and finance at Nissan North America. The Canton, Mississippi, plant that makes the Titan will start producing commercial vehicles for Nissan and no jobs will be lost, Thormann said.
To clear room to build the Nissan pickup in Saltillo, Chrysler will shift production of its own pickup trucks from Mexico to truck plants in St. Louis and Warren, Chrysler President and Vice Chairman Tom LaSorda said.
“Forging the right tactical partnerships is critical to the long-term success of Chrysler,” LaSorda said in the statement.
Thormann and LaSorda said that the agreement is limited to the two vehicles and there are no ongoing merger discussions, but Thormann did say both companies would continue to consider product-sharing opportunities.
Aaron Bragman, an analyst with the consulting company Global Insight, said the agreement doesn’t necessarily mean Chrysler is headed for a full-fledged alliance with Nissan-Renault, although the two automakers are a good fit for Chrysler. Such deals allow automakers to play to their strengths and share the risk and capital costs of bringing products to market.
“I think this is exactly the kind of thing that Chrysler needs to be doing to guarantee its future,” Bragman said.
In January the two companies announced a deal for Nissan to supply versions of its Versa subcompact for Chrysler to sell in undisclosed parts of South America. No specific terms were announced.
Under the new deal, both the Chrysler subcompact built by Nissan and the pickup truck built by Chrysler will be unique designs, although LaSorda said they will share some mechanical underpinnings.
Thormann said the agreement will allow Nissan to offer more cab and engine configurations than it does now. He wouldn’t say whether Nissan will take advantage of Chrysler’s hybrid technology, which was developed in conjunction with General Motors Corp. and BMW AG. Chrysler plans to bring a hybrid version of its Dodge Ram pickup to market in 2010.
Thormann said U.S. pickup truck sales have been declining since the Titan was released in 2004, but he said there are still 2 million full-size pickups sold in the U.S. each year.
“It’s still a very attractive segment to have a product offering in,” he said.
Titan sales fell 9 percent in 2007. In the first quarter of this year, Titan sales plummeted about 40 percent. They were the victim of heated competition — the new Dodge Ram and Ford F-150 will be out later this year — and a slowdown in housing construction.
Chrysler has been desperate for a small car in North America as high fuel prices send consumers away from its trucks and sport utility vehicles to more fuel-efficient models. U.S. subcompact sales were up about 30 percent in the first three months of this year, and LaSorda said the global demand for subcompacts tops 10 million cars per year.
“I think the timing is good. I wish I had them now but I’ll wait for great cars,” LaSorda said. He said Chrysler has already finished designing its subcompact.
LaSorda said this deal won’t affect ongoing talks with Chinese automaker Chery Automobile Co. to make small cars for Chrysler to export to the U.S. and Western Europe.
“We believe we need more than one small car for NAFTA, so we will be counting on Chery to help us with that,” he said, referring to sales in the U.S., Canada and Mexico.
USA Today reports, “Nissan says it will stop making the Quest minivan and its full-size SUV, the Infiniti QX56,” instead using the factory that currently makes the vehicles to produce “light commercial vehicles.” Nissan “did not say when or where —or if — it will build next-generation versions of the minivan and big SUVS, which are slow sellers in declining market segments,” meaning production of the vehicles may cease altogether. Nissan spokeswoman Frederique Le Greves told reports, “When we get to the end of each vehicle’s cycle, we look at the market” and decide whether to offer new versions of the vehicles.
While Nissan insists it has not made a formal decision to remove the vehicles from its lineup, the move may be a prelude to doing just that. Kicking Tires comments, “Sounds to us like company speak that Nissan will not build new versions of the two. If it actually announced that fact today, though, it could impact sales of the 2009 models that will still be built and sold on new-car lots.”
The AP recently reported that Nissan suffered a 4-percent sales decline in the first quarter of 2008, and poor minivan and SUV sales were part of the reason for the drop. “Nissan’s truck and SUV sales plummeted 20 percent, with the Nissan Titan pickup down 45 percent for the month and the Nissan Armada SUV [the QX 56 is a modified Armada] off 43 percent.”
USA Today called the Quest “an also-ran in the shrinking minivan market, with sales down about 38% the first quarter vs. a year ago, according to Autodata. Its sales rank it eighth among nine vans currently in production, behind even the nearly invisible Mazda5 mini-minivan.” The QX45, meanwhile, “sells in such small numbers that it ranks 80th of 102 SUVs currently in production.”
Research the current models, and their competition, with U.S. News’ rankings and reviews of minivans and luxury large SUVs.
Nissan’s top executive said Friday he believes environmentally friendly electric cars will dominate the future as automakers join the fight against global warming.
Nissan and French alliance partner Renault are already developing its first electric car in Israel that it hopes to mass market by 2011, Nissan CEO Carlos Ghosn said.
However, the group is also working on other advanced vehicles including hybrid engines and hydrogen fuel cells as government policies in different parts of the world will dictate the trend for automakers, he said.
Ghosn was in Malaysia to deliver a speech hosted by the Malaysian government’s investment arm, Khazanah Nasional Bhd.
“I think the future would be … zero emission cars. Particularly among urban drivers, there is a lot of appeal. We are pushing particularly this technology but we are not putting all our eggs in the same basket,” Ghosn said at a news conference.
Ghosn, who is also chief executive at Renault, pointed out that diesel cars accounted for half of sales in Europe but only less than 1 percent of sales in Japan and the United States.
“We have to be careful that we do not, as car manufacturers, embark in only one direction because we can be taken by surprise as regulations and political campaigning can bring different twists into what in the end is the dominant technology,” Ghosn said.
“We have to be prepared into pushing different technologies in different markets… that is, in a nutshell, our strategy,” he said.
Ghosn earlier visited a new 230 million ringgit ($72 million) plant by Tan Chong Motors, the sole distributor of Nissan cars in Malaysia.
Despite a slump in the U.S., Japan and Europe markets, he said Nissan expects its global sales for the fiscal year through March 2008 to exceed its forecast of 3.7 million units, but didn’t give a specific figure.
For the fiscal year through March 2009, he said mature markets are likely to remain stagnant but sales will be boosted by growth in developing countries such as Russia, China, India, the Middle East and Southeast Asia.
“In 2008 you are going to see a mixed picture,” he said.
“But we have a strategy of technology and products and enlargement of the brand … that will allow us to grow even though the overall market is stagnant.”
Ghosn said the group is working with India’s Mahindra and Mahindra Ltd. to produce a below $3,000 car by late 2010 or early 2011. He pledged the car will be fuel-efficient and environmentally friendly.
“If it is successful in India, we will launch it in many developing countries where we think there is demand,” he said.
India’s Tata Motors in January unveiled the world’s cheapest car, a $2,500 four-door subcompact that it said would transform the auto industry. But environmentalist have expressed concerns over increasing pollution and pressure on global oil prices.
The 2009 Nissan Murano was the best performer in new crash tests of midsize sport-utility vehicles, while the Hummer H3 posted one of the poorest showings, results released Tuesday by the Insurance Institute for Highway Safety indicated.
The institute, which is funded by the insurance industry, said the redesigned Murano was the only vehicle among the nine tested to receive the highest rating in front, side and rear crash tests. It praised Nissan for making electronic stability control standard on the 2009 Murano. The system helps prevent swerving.
General Motors’ (GM) H3 was the only vehicle in the group that didn’t receive the top rating for frontal-crash protection. It earned the second-highest rating of “acceptable” because the test indicated a high likelihood of injury to the driver’s right leg. The H3 also received an “acceptable” rating in the side crash test and the worst rating of “poor” in the rear crash test.
A message seeking comment was left Monday with GM.
The institute said it downgraded side crash results for the H3, Kia’s Sorento and Chrysler’s Jeep Liberty/Dodge Nitro — which are built on the same platform — because they lacked air bags that protected the torso. All three had curtain air bags that protected the head. But the tests indicated a likelihood of injuries to the driver’s rib cage.
The Jeep Wrangler also received a low rating for side protection because its side air bags are optional. It was the only vehicle in the group without standard side air bags.
Besides the H3, worst performers in the rear crash test were the Mitsubishi Endeavor and Jeep Liberty/Dodge Nitro. The Jeep Wrangler, Suzuki XL7, Mazda CX-7 and Mazda CX-9 got the second-lowest rating of “marginal” on that test.
The redesigned 2009 Nissan Murano has earned a Top Safety Pick rating among 10 midsize SUVs crash-tested by the Insurance Institute for Highway Safety.
The Murano was the only SUV to get a Top Safety Pick honor by scoring Good in all three crash tests. (Results in front, side and rear crash tests by IIHS are rated as Good, Acceptable, Marginal or Poor.) The 2008 Mazda CX-7 and Mazda CX-9, as well as the 2008 Mitsubishi Endeavor, fell short of the Top Safety Pick rating, IIHS says, because head-rest protection in rear crash tests was rated Marginal in the Mazdas and Poor in the Mitsubishi.
Though many would classify the Murano, CX-7 and CX-9 as crossovers, IIHS classifies them as SUVs.
The Kia Sorento was the only vehicle to get the lowest rating, Poor, in side-impact tests, even with its standard side airbags. The Jeep Liberty, Dodge Nitro and four-door Jeep Wrangler were rated Marginal in side crash tests; the Wrangler was rated Marginal in its rear crash test. The Hummer H3 was rated Acceptable in both front and side crashes, but Poor in rear crashes, as were the Endeavor, Liberty and Nitro.
The good news, IIHS says, is that in those same tests in 2001, half of the models failed to get a Good rating in front crash tests, but this year only one, the H3, missed getting a Good rating. It rated Acceptable.
The other good news is that all the models offer standard electronic stability control. IIHS won’t award any vehicle a Top Safety Pick rating without having that system, which prevents under- or oversteer and reduces the chance of slip-sliding or skidding.
While IIHS ratings provide another tidbit of safety information, they are also self-serving for the insurance industry. The higher the safety rating, the lower the cost to repair a vehicle (or care for an occupant) after an accident, and IIHS comprises insurance companies that pay motorists for their vehicles. Naturally, the safer cars are, the less insurers pay.
Yes, that’s a Suzuki badge on the front of that Nissan pickup. The two Japanese automakers have teamed up to create a new Frontier-based pickup called the Equator, which will be sold under the Suzuki marquee. The new midsize truck was launched last week at the Chicago Auto Show.
Suzuki is entering the dying North American midsize pickup truck scene with help from Nissan that expands a working relationship between the two automakers.
In 2006, both decided to further develop their partnership- which had seen Nissan selling rebadged Suzuki mini-cars in various markets, as well as Suzuki using Nissan-supplied transmissions in certain models. More lately, Suzuki’s been selling a Nissan built minivan called “Serena” in the Japanese market.
The new Suzuki truck variant will be built at Nissan’s manufacturing operations in Smyrna, Tennessee, and marketed exclusively by Suzuki on this side of the world. Suzuki notes that many of its customers are current owners of Suzuki power toys, like a motorcycle or ATV- and that the new Equator fits into their ‘way of life’ mantra.
Highlighting this concept, three unique Equator concepts were also unveiled. Labelled the RMZ-4, Quad and Quay, the trio cater to off-road, adventure and watersports enthusiasts, respectively.
The Suzuki Equator goes on sale later this year, with pricing details to be announced closer to the time.