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Report: Chrysler, Nissan May Build Cars Together

Automakers are in talks over an agreement to jointly produce midsize cars, according to a Wall Street Journal report.

NEW YORK (AP) -- Chrysler LLC and Nissan Motor Co. are in talks over an agreement to jointly produce midsize cars, according to a published report.

Chrysler is discussing an agreement with Nissan under which the Japanese automaker would produce midsize sedans that Chrysler would sell in the U.S. under its own brand, The Wall Street Journal reported Thursday, citing people familiar with the discussions.

Nissan spokesman Fred Standish noted that the two companies have announced partnerships earlier this year, but he declined to comment further.

"We said then, and we're saying now, that we're continuing to explore opportunities to work with Chrysler, but we don't have anything to announce right now," Standish told The Associated Press.

Nissan spokeswoman Pauline Kee in Tokyo said the report was speculation, and a Chrysler spokesman declined to comment.

Earlier this year, the automakers announced two tie-ups in a growing partnership between them. In January, they announced a deal in which Nissan would build small cars for Chrysler to sell in South America. The car will go on sale in 2009 and be based on Nissan's Versa small car, Standish said.

In April, the automakers said Nissan will make a new small car designed by Chrysler, while Chrysler will make a full-size pickup truck designed by Nissan.

Both products will be sold in North America, and the new Chrysler subcompact will also be sold in Europe and other global markets starting in 2010. The Chrysler small car will be made at a Nissan plant in Japan, while Chrysler will make the pickup truck at its plant in Mexico, to go on sale in 2011.

The growing partnership comes as Chrysler is working to expand its presence abroad as it grapples with a deteriorating auto market in the U.S., brought on by a weak economy and an abrupt shift in demand away from trucks and sport utility vehicles toward more fuel-efficient cars.

Chrysler's sales are down 23 percent so far this year, the worst drop of any major automaker, and it has stopped offering leases through its financial arm because of falling truck and SUV values. Cerberus Capital Management LP, the private equity firm that bought 80.1 percent of Chrysler from the former DaimlerChrysler AG a year ago this week, has been struggling to bring the company back to profitability.

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