By all accounts, it's official--car companies are hurting, especially those that make a lot of trucks. Regardless of why this is happening (take your pick: credit crunch, troubles abroad, oil prices, national debt, global warming), the consensus is the fundamental ways in which these big companies operate will have to change dramatically. Ford and GM have been doing an impressive job of cutting losses to get back in shape (it was only last year when many said both were headed for disaster--and now, at least for the first quarter of 2008, they're both showing profits), but, for those who were watching closely, a recent handshake agreement between two big players has given us a glimpse of what the automotive landscape could become.
Mark Williams, Truck Trend EditorA little background: Last December, Nissan and Chrysler announced they were exploring possible "opportunities," as they put it. There had been rumblings that Chrysler wanted to expand its nonexistent presence in markets outside the U.S. and would need a partner to make that happen. Likewise, it was no secret the head of Nissan/Renault, Carlos Ghosn, was worried about lagging U.S. Titan sales. This all was happening at a time when the Titan was scheduled for some serious redesign and upgraded engineering in the next few years. So when word came down the two were talking, it made sense.
A car like the Nissan Versa, a versatile subcompact starting at $13,000 and getting over 30 mpg on the highway, would be a perfect fit for Dodge or Chrysler to enter new international markets. But more recently, the "exploration" turned into something serious (dare we say a full-blown partnership); Chrysler announced it'll build a full-size pickup truck for Nissan out of the Saltillo, Mexico, plant, previously used for Ram HD models. The affiliation allows Chrysler to move slowing Ram HD production back to the U.S. in one of the two other plants producing Ram HDs (St. Louis North and Warren, Michigan).
The Titan, currently built in Canton, Mississippi, alongside the Nissan Armada, Quest, and Infiniti QX56, was to be redesigned in 2010, but when discussions with Chrysler put usage of the new Dodge Ram (one of the highlights of the Detroit auto show this year) into play, Nissan jumped at the chance to get at the chassis and save much, if not all, of the redesign, plant upgrade, and engineering costs.
On the surface, it may seem strange that one manufacturer would kill a vehicle it spent so much development money on to get into this truck-savvy market, but from the very beginning, Nissan's investment costs for the all-new Titan (which made its debut in 2004) have been smartly spread over several vehicles, such as the Frontier, Armada, Pathfinder, and the aforementioned QX56. And with sales of the Titan falling off a cliff (down almost 30 percent over last year's weak numbers), the strategy of spreading costs over multiple vehicles instead of being locked into one or two models, ultimately gave Nissan the chance to take advantage of this opportunity with Dodge, thus saving money, upgrading to a better product, benefitting from more powertrain options, and still competing in a segment in which it wants to stay. In addition, Nissan also recently announced it'll be working with Suzuki, supplying it with a (as of yet unspecified) number of Frontier platforms so Suzuki can play in the compact truck market.
For now, Nissan seems to be at the center of this new world order as various relationships develop and bear fruit. To our eyes, Nissan is making out like a bandit at the moment, but if we know the crew at Chrysler, specifically the product planners at Jeep and Dodge, it won't take too long before they dream up some interesting ideas of their own. And we know the other manufacturers are watching them closely.
It wouldn't surprise us if Ford thinks long and hard about using a new Ranger platform for a number of other crossover or SUV-like vehicles, or if GM started to think about working with someone like Audi or Porsche, or if Toyota decided to call up someone like Subaru (oh wait, that already happened--Toyota's going to use the WRX motor in its next sports car). Regardless, we expect to see more of these melding of strengths between large and larger companies to create newer, less costly, more efficient products. Takeovers, at least in the auto sector, could become a thing of the past as engineers and designers become less and less brand-phobic and more opportunistic. We'll see.