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Nissan, Chrysler seeking supply deal in US market

Nissan Motor Co and Chrysler LLC are in talks to supply each other with vehicles as they seek to expand their market share in North America amid tightening competition, a Japanese daily reported yesterday.

The two automakers are negotiating a cost-saving original equipment manufacturing agreement, whereby each firm provides the other with selected products to be resold under its brand, the Nikkei Shimbun reported.

Japan's third-largest automaker is seeking to tap into Chrysler's pick-up and minivan lines, while the ailing US firm is interested in Nissan's subcompacts such as the Versa, the newspaper said without citing sources. Neither company could be reached for confirmation.

The agreement will allow Nissan to boost its line-up of mid- to large-size vehicles in the North American market amid slowing sales of its Titan trucks and Quest minivans, the Nikkei reported. Chrysler is seeking to sell subcompacts, it said.

Nissan chief Carlos Ghosn has spoken of the need to have a US partner although last year General Motors rejected talks on a three-way alliance with Nissan and its French counterpart Renault SA.

Meanwhile, German auto giant Daimler and India's Hero Group have agreed to form a joint venture to produce light, medium and heavy duty commercial vehicles for the Indian market, Daimler said on Friday. Production for export markets is expected to follow at a later stage, a statement said.

Both firms have signed a shareholders' agreement to be submitted to India's Foreign Investment Promotion Board for formal approval.
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