Chrysler, Nissan in talks to make midsize cars: report

Vice Chairman and President for Chrysler, Jim Press, introduces the 2009 Dodge Challenger at the 2008 New York International Auto Show March 19, 2008.

(Reuters) - Chrysler LLC is in talks with Japan's Nissan Motor Co (7201.T) NSANY.O about jointly producing midsize cars, a partnership that would move the U.S. auto maker toward a radical new business model, the Wall Street Journal said Thursday.

In April, Chrysler and Nissan entered a deal under which Nissan would build a small car for Chrysler using the North American automaker's design and Chrysler would build a new full-sized pickup truck for the Japanese automaker using Nissan's plans.

Since then, the two companies have been discussing an agreement under which Nissan would produce midsize sedans that Chrysler would sell in the U.S. under its own name, the Journal said, citing people familiar with the matter.

Chrysler has been in touch with Nissan and is evaluating whether it makes financial sense to partner with the company, the paper said. "We continue to seek opportunities to work with Chrysler," said Nissan spokeswoman Pauline Kee.

Kee declined to confirm or deny the Journal report on midsize cards, while Chrysler did not immediately return calls seeking comment.

Chrysler, the number three U.S. automaker, is focusing its engineering resources on parts of the market where it is a strong player -- mainly trucks, SUVs and minivans, the paper said, citing one person familiar with the company's strategy.

Chrysler has moved quickly since its acquisition by Cerberus Capital Management last summer to address an unfocused vehicle lineup and to answer customer complaints ranging from materials, interiors, noise and vibration.

(Reporting by Nathan Layne in Tokyo and Tenzin Pema in Bangalore)