Nissan, Chrysler small-car deal near

Christine Tierney / The Detroit News

Chrysler LLC and Nissan Motor Co. are close to finalizing a deal for Nissan to supply Chrysler with a small car to be built in North America, sources familiar with the negotiations said late Thursday.

The deal could be announced as early as today, the sources said.

The agreement would call for Nissan to build a version of its Versa compact car in Mexico that Chrysler would sell under its own brand in South American countries, according to the Wall Street Journal.

Nissan and Chrysler began talks on possible ways to help each other develop new vehicles last summer after Daimler AG agreed to sell Chrysler to private equity firm Cerberus Capital Management LP.

The talks initially focused on technical cooperation: Nissan was interested in Chrysler’s expertise in full-size truck manufacturing, while the newly private Auburn Hills automaker wanted to tap Nissan’s strength in developing appealing small cars.

Nissan Chief Executive Officer Carlos Ghosn confirmed in December that the two automakers were in discussions.

Ghosn has said he was still interested in adding a North American partner to the Renault-Nissan alliance, but the deal with Chrysler does not entail overarching alliance negotiations.

Both Chrysler and Nissan already have forged cooperative deals with other automakers. Chrysler will produce a minivan for Volkswagen AG in North America, while Nissan collaborates with Suzuki Motor Corp. and Mitsubishi Motors Corp. on minicar production. Nissan also said last month that it would build a midsize pickup based on its Frontier for Suzuki at its Smyrna, Tenn., plant.

Chrysler, which expected to lose $1.6 billion last year, has reached a deal to obtain a subcompact from China’s Chery Automobile. But Chrysler officials have recently said that Chery did not yet have a model that met their standards.

The U.S. automaker, which generates most of its revenue on light truck sales, has been hurt by high gas prices, which have shifted consumer demand toward more fuel-efficient vehicles.

Chrysler also is seeking to expand faster outside North America, where it generates more than 80 percent of its sales. In 2007, the automaker had its best year yet outside North America, with sales increasing 15 percent to 238,218 cars — which represents about 9 percent of total sales.

"Our international business shows the potential we have in front of us," Jim Press, president and vice chairman, said last week. "We are poised to grow and poised to compete with the global best."