Chrysler LLC and Japan's Nissan Motor Co. said Monday they will expand their current partnership to include the production of vehicles to be sold in North America, Europe and other global markets.

Nissan will manufacture a small, fuel-efficient car designed by Chrysler in its Oppama plant in Japan. It is expected to hit North American, European and other global markets in 2010.

Chrysler will manufacture a full-sized pickup truck designed by Nissan at its Saltillo plant in Mexico with sales expected to begin in North America in 2011.

Chrysler production at the facility will be shifted to two US plants in order to accommodate Nissan.

This latest agreement follows a deal reached in January for Nissan to build a new sedan for Chrysler to be sold in South America.

Financial terms were not disclosed.

"In January, we said we would continue to look for additional OEM opportunities with Chrysler," said Carlos Tavares, executive vice president of Nissan Motor Company.

"This latest agreement builds on Nissan's proven track record to deliver win-win product exchanges with multiple manufacturers around the world."

The two automakers also agreed to "maintain an open dialogue to explore further product-sharing opportunities," the companies said in a joint statement.

Nissan chief Carlos Ghosn has spoken of the need to find a US partner for the company, in which French automaker Renault holds a controlling stake.

Talks broke down in 2006 for a three-way, three-continent alliance with General Motors, the leading US automaker.

Chrysler officials said the deal is not an indication of a deeper partnership to come.

"These are both just product deals," Chrysler LLC president and vice chairman Tom LaSorda said in a conference call.

Chrysler officials emphasised on Friday that the new agreement with Nissan does not indicate they are dissatisfied with the relationship with the company's Chinese partner, Chery Motors.

"Chery will continue to be in our future planning for supply in (North America) as well as Western Europe," LaSorda said.

"Once the designs and the platforms are ready for export to these markets to meet their stringent safety and emissions standards as well as the quality standards then we'll export and we do not have a date yet set for exporting to Western Europe or (North America,)" he said.

Chrysler, which is the third-largest US automaker, has been slashing thousands of jobs in a bid to adapt to a shrinking US car market.

Last year, Chrysler ended a nine-year tie-up with Daimler of Germany, with US private equity firm Cerberus buying the ailing Detroit giant.

LaSorda said the deal with Nissan was just the latest piece of "good news" at the company and told reporters to look forward to more signs that "Chrysler is on the rebound".

AFP

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