Chrysler Giving Up on Cars?

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2006 Dodge Ram 2500 Mega CabIt makes sense to some industry analysts and to the team here at TheCarConnection.com--but Chrysler is denying that it's planning to drop its car lineup and link up with Nissan in an alliance that would leave Chrysler to focus on trucks, SUVs, and minivans.

The Wall Street Journal reports the two companies are discussing a broad-ranging alliance that would add to their agreements to build trucks and cars for each other. Last year, the pair announced a plan in which Nissan would supply Chrysler a small car for sale in markets outside the U.S., derived from its Versa hatchback, and would engineer a new small car for Chrysler for sale in the U.S. For its part, Chrysler will develop the next Titan for Nissan.

The new reports say the companies are embarking on a "radical" plan that if approved, would lead Chrysler to cease development on passenger cars. The Detroit News says Chrysler is still working on Plan D, which would revamp Chrysler's mid-size Avenger and Sebring sedans. Chrysler is also working on a planned restyling of its 300/Charger sedans for the 2011-2012 time frame.

A pairing with Nissan would be a logical move, because there's so little overlap in expertise. Like Northwest and Delta teaming up, Chrysler and Nissan excel in what the other company doesn't--Chrysler's minivans, Jeeps and big trucks are the perfect complement to Nissan's Altima, Z, and Infiniti lineup. It also fits the pattern of alliances that Nissan's talked up for a decade--and Chrysler's owners at Cerberus might be keen to tap for a quick product fix.

What's your take--is Chrysler better off tying its future to Nissan, or does it have a better plan to go it alone? Tell us in a comment below.

10 Responses to “Chrysler Giving Up on Cars?”

WDP

August 8th, 2008 - 8:33 am

Whatever it takes to ride out the storm.

Dave

August 8th, 2008 - 8:53 am

Yes this may work, I can see nissan supplying small cars and hybrids but Chrysler will still need Challangers, Vipers, 300 cars in there line up & I think Nissan could not help with that. Chrysler could supply minivans & hybrid pickups to Nissan.

Kevin

August 8th, 2008 - 9:28 am

Interesting thought, but if Chrysler truly gives up the development of cars, then they not only would give up a great heritage, but they would also be held hostage to the whims of their competition. I would think that then it would only be a matter of time until they get purchased by that very company they team up with (in this case Nissan).

Eddie

August 8th, 2008 - 10:07 am

I think this could work if the contract between the two companies is written to protect a hostle take-over and it needs to protect both companies from any conflict of interest. Nissan will be getting a much needed expertise in the trucks/minivan business and it will make money lending its knowledge of small cars/engines to Chrysler. But, truck and minivan markets are slowing down so I don’t expect Nissan to gain much profit from what they will get from Chrysler as compared to the benefit Chrysler will get from having Nissan supply them with small cars bacause small car market is expanding in north America. On the down side for Chrysler, they will outsource the small car business to Nissan and Nissan might force them to dismantle their capacity/knowledge in this area which may leave Chrysler weak and have them under Nissan’s mercy. As I said, the contract needs to be written well to protect both companies in cases like these. I don’t think Chrysler will exit the mid-size car market. The article only mentioned the SMALL car business so Chrysler needs to learn from Nissan and maybe have Nissan supply 4 banger engines for Chrysler’s mid-size cars while Chrysler needs to make good progress on improving quality of their mid-size sedans!!!!! If that happens, both companies will get what they need out of the joint venture! CAFE standards of 35MPG are coming fast and Auto companies need to take drastic measures to stay ahead of the curve and compete.

Dan

August 8th, 2008 - 12:14 pm

Chrysler no longer has the financial capital or the human capital - expertise - to support a full line of vehicles across several classes of the market. They have become weaker in their old core of minivans and Jeeps, quality is poor, fuel efficiency bad. Larger Ford and GM are struggling to survive, Chrysler starts out further behind on quality and on modern products.

The only way to support the dealer base is to focus on a few vehicle classes for in-house design and manufacturing, and outsource everything else. Even so, it is highly unlikely that it can succeed in the long run.

Chrysler will be sold off piecemeal, or will go bankrupt.

Bob

August 8th, 2008 - 1:34 pm

What is Nissan’s incentive? Are their Titan and Quest (or whatever it’s called now) not successful? I’m sure they aren’t Dodge Ram successful, but Nissan doesn’t operate on that scale for even their successful cars, do they?

JKD

August 8th, 2008 - 2:39 pm

Dodge Ram is successful? Jebus - where have you been in the past two years… None of their cars or trucks bring in any profit anymore, so they should get rid of their cars first, then quickly dump the trucks, and walk away into the sunset holding hands with Isuzu (January 2009 to be exact)

Dave

August 8th, 2008 - 3:39 pm

What they shoud just go away? They should do what ever it takes to keep alive. Walk away into the sunset, so I suppose all the jobs at the factorys, supplyers and the dealer ship employees should just go away also right? GET REAL!!!! Chrysler will survive this either buy itself if the market and economy get better or if/when Nissan buys them.

Bob

August 8th, 2008 - 3:42 pm

Where have I been? I would bet the Dodge Ram is still the #3 fullsize pickup (behind GM and Ford’s fullsize offerings). Trucks have fallen off recently very hard, but all of them have, not just Dodge. Does the Titan sell anywhere close to the #’s that the Ram sells in?

As an aside, where’d you get two years from? You think the pickup truck market has been declining for that long?

Bill

August 9th, 2008 - 12:49 pm

Seems linking up with Nissan could benefit both in regards to R and D costs in these tough times. Still think Daimler was a great partner for both after seeing the great success of the 300 lineup which was basically an E class derived chassis. Had Daimler for the long haul stuck with Chrysler and shared technology both would have stayed strong and benefitted, but the German shareholders thought different. The domestics need to open their eyes and take a good look and model themselves after the Asian manufacturers. How long has Toyota marketed Corolla, Camry and all their other brand names, they don’t change model names but always improve and freshen them. I look at Ford now and especially Lincoln and all I see is confusion for the buyer with all these “letter” cars. But if I had produced the “Town Car” as long as Ford did with NO REAL CHANGES guess I would want to rename it MKZ or something! Bill

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