The Auto Channel: North America | Europe

Chrysler and Nissan Confirm New Model OEM Product Agreements

AUBURN HILLS, Mich. and TOKYO, April 14 -- Chrysler LLC and Nissan Motor Co., Ltd. , today announced two new agreements for the supply of products between both companies. In January, Nissan agreed to supply Chrysler with a new car based on the Nissan Versa sedan for limited distribution in South America on an Original Equipment Manufacture (OEM) basis in 2009.

This new OEM exchange benefits both companies through range extension and the utilization of global manufacturing capacity. Highlights of the new agreement:

Nissan will manufacture an all-new, fuel-efficient small car based on a unique Chrysler concept and design. This new segment entry for Chrysler will be sold in North America, Europe and other global markets in 2010, and manufactured at Nissan's Oppama Plant in Japan.

Chrysler will manufacture a full-size pickup for Nissan. Based on a Nissan unique design, this truck will be manufactured at Chrysler's Saltillo (Mexico) Assembly Plant. In order to accommodate this product, Chrysler will shift volume from Mexico to its U.S.-based assembly plants that produce pickup trucks. Sales of the pickup in North America will start in 2011.

This latest OEM supply agreement extends a long standing product exchange relationship between the two corporations, with Nissan affiliate JATCO already supplying Chrysler with transmissions since 2004.

"Forging the right tactical partnerships is critical to the long-term success of Chrysler," said Tom LaSorda, Chrysler LLC President and Vice Chairman. "It also builds on the Company's inherent strengths, including the ability to respond rapidly and creatively to emerging opportunities."

"In January, we said we would continue to look for additional OEM opportunities with Chrysler," said Carlos Tavares, Executive Vice President, Nissan Motor Company. "This latest agreement builds on Nissan's proven track record to deliver win-win product exchanges with multiple manufacturers around the world," continued Tavares. Since the signing of the first OEM in January, the two companies have also agreed to maintain an open dialogue to explore further product-sharing opportunities.

Chrysler LLC, headquartered in Auburn Hills, Mich., produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. Its product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Dodge Charger. The Chrysler Foundation -- the primary source of charitable grants made by Chrysler -- annually supports hundreds of charitable organizations with an emphasis on community growth and enrichment, education, arts and culture, public policy, youth development and disaster relief programs throughout the United States and, increasingly, the world. Chrysler is a unit of Cerberus Capital Management.

Nissan Motor Company generated global net revenues of 10.468 trillion yen in 2006. Nissan is present in all major global auto markets selling a comprehensive range of cars, pickup trucks, SUVs and light commercial vehicles under the Nissan and Infiniti brands. Nissan employs 224,000 people worldwide.

Under the Nissan Value-Up business plan, the company continues to focus on long-term sustainable and profitable growth driven by three commitments:

  -- To maintain top level of operating profit margin among global
     automakers
  -- To achieve global sales of 4.2 million units in 2009
  -- 20% return on invested capital on average over the course of the plan

KEYNORTH AMERICAN B-SEGMENT COMPETITORS
Chevrolet Aveo, Honda Fit, Hyundai Accent, Toyota Yaris, Kia Rio Important to note while B-Segment is growing fast, compact car-segment at 13% share in U.S. is a far larger part of industry.

Sales of B-Segment Vehicles:
 
World
2007 full year B-segment was 10 Million units (19% share), up 9% in 2007 (estimate)
High Volume Region in World is West Europe - 3.9 Million units in 07 (28% share)
Highest Share Region in World is South America - 53% share in 07 (1.7M units)
 
U.S.
2007 full year B-segment was 332,000 units (3% share), up 18% for the year
2008 YTD B-segment is 92,000 units, up 32%, versus industry down 9%
 
Canada
B-segment share in Canada is 6% and growing 37% this year.
 
 
2007 10 Million B-segment sales by region
(estimates from Global Insight)
Ranking By Volume:
West Europe (3.9 M) 
Asia (2.0 M) 
South America (1.7M) 
East Europe (1.4M) 
North America (660K) 
Africa (231K) 
Middle East (221K) 
Central America/Caribbean (27K) 
 
2007 19% share B-segment share of industry by region
(estimates from Global Insight)
By Share of Market:
South America (53%) 
East Europe (32%) 
West Europe (28%) 
Africa (27%) 
Asia (17%) 
Central America/Caribbean (16%) 
Middle East (12%) 
North America (4%)