updated 6/2/2006 9:26:59 AM ET 2006-06-02T13:26:59

Nissan will supply pickup trucks for Suzuki to sell in North America in an expansion of the Japanese automakers' business cooperation that includes mutually supplying vehicles and sharing plants, both sides said Friday.

Nissan Motor Co. and Suzuki Motor Corp. already have a partnership, in which Suzuki provides Nissan minicars, mainly for the Japanese market, to be sold under the Nissan brand.

Under the latest deal, Nissan will supply Suzuki a pickup truck from 2008 for the North American market, while Suzuki will supply a small car for Nissan to sell under the Nissan brand in Europe, they said in a statement.

Starting from the end of this year, Nissan will supply a minivan to Suzuki, and Suzuki will supply an additional minicar model to Nissan, both for the Japanese market, they said.

Nissan does not make its own minivehicles, which have engines of up to 0.66 liters and get tax breaks in Japan. Minicar sales have been booming lately in Japan while the overall auto market here has remained flat.

Nissan, which has an alliance with Renault SA of France, and Suzuki, a Japanese automaker that specializes in minicars, will also share production facilities in emerging markets, and that will start at Suzuki's plant in India, they said.

In the past, Suzuki has had such supply agreements with U.S. automaker General Motors Corp. But those ties have loosened recently after GM sold 17 percent of Suzuki in April for about $2 billion, leaving it with a 3 percent stake.

That followed last year's sale of GM's entire 20 percent stake in Fuji Heavy Industries, the Japanese maker of Subaru cars. GM, which has been struggling to boost profits, also sold the 7.9 percent stake it held in Japanese truckmaker Isuzu Motors Ltd.

Speculation had been growing on whether Suzuki will pick other auto partners in place of GM. Nissan and Suzuki denied Friday that their partnership will step up to involve holding stakes in each other.

"Through our existing agreement with Suzuki, we have built up a relationship of trust and partnership for mutual benefit," Nissan Chief Operating Officer Toshiyuki Shiga said.

The deal is also a plus for Suzuki because Suzuki needs to start offering more large-size models if it hopes to succeed in global markets.

"This expansion of business collaboration with Nissan will strengthen Suzuki's global competitiveness," said Suzuki President Hiroshi Tsuda.

Earlier this week, Shiga said the company was considering increasing its lineup of tiny cars in response to the recent plunge in the automaker's sales in Japan, which he said was worse than expected.

Nissan's sales in Japan in April, when excluding minicars, fell 27 percent on-year, but dipped 18.5 percent when including minicars. Nissan has said it's not considering making its own minicars because the deal with Suzuki was proving lucrative.

Nissan, Japan's second biggest automaker, faces formidable competition at home and abroad from Toyota Motor Corp., No. 1 in Japan and No. 2 in the world, and Honda Motor Co.

"We face various challenges in making the Japanese market a source for our profits as a global manufacturer," Shiga said earlier this week at the company's Tokyo headquarters.

Nissan shares, which have gained about 30 percent over the past year, finished up 0.15 percent at 1,372 yen ($12). Suzuki shares jumped 2.9 percent to 2,675 yen ($24). Suzuki has risen about 50 percent over the last year.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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