Nissan and Chrysler vehicle supply plan shelved

Aug 28 2009 by Iain Laing, The Journal

NISSAN and Chrysler have shelved a plan to supply vehicles to each other following the collapse of the industry in the global economic slump.

The US company and the Japanese manufacturer, which has more than 3,000 staff at its plant in Washington on Wearside, agreed the deal last year.

It would have seen Nissan supplying Chrysler with compact cars from next year and in turn Chrysler would have supplied Nissan with a pick-up truck from 2011.

But the US carmaker has been one of the biggest victims of the collapse of the motor industry and since then has filed for bankruptcy and signed an alliance with Italian car-maker Fiat.

The companies said they had abandoned the plan “in light of significant changes in business conditions since the projects were announced”.

Nissan has suffered from the downturn and cut 1,200 staff on Wearside earlier this year but has since taken on hundreds of temporary staff as business has been boosted by the Government’s Scrappage scheme.

It is also looking to expand into the electric car market and plans to open a vehicle battery factory.

Chrysler, which filed for bankruptcy in April, then signed a deal with Fiat, giving the Italian firm a 20% stake in the company.