Chrysler and Nissan become Allies in Car Production

Chrysler LLC and Nissan Motor co Ltd said both companies will join a project to manufacture cars for each other, the groups announced on Monday.

Nissan will produce a small sedan car for Chrysler, similar to the Versa and Chrysler will build Nissan a version of its pick up Dodge Ram.

Chrysler will produce the pickup for Nissan at a factory in Saltillo, Mexico, the companies stated today. Nissan's small car for Chrysler will be assembled at its plant in Oppama, Japan and sold in North America, Europe and other international markets by 2010.

With this, both companies signed their third fabrication agreement and the second to be disclosed in the past four months, the Fortune magazine said.

Some analysts believe Chrysler's plan to produce its own small sedan follows the need of the company to expand beyond North American market.

As for Nissan which recently had announced an investment of over $100 million dollars in a Mississippi plant, the agreement could bring the Japanese company closer to the U.S. market dominated in its majority for General Motors Corp. and Ford Motor Co.

Shares of Nissan closed 0.69 percent down to $15.93 at the close of Monday trading in Nasdaq.