Chrysler has withdrawn from the agreement it signed with Nissan last year that would have seen the Japanese carmaker supplying it with two smaller cars to plug holes in its range, a strategy that is rendered unnecessary now it has entered into its alliance with Fiat. The venture was officially put on hold in mid February as Chrysler was then staggering towards bankruptcy and was trying to sort out a new future with Fiat.

A joint statement issued by the two carmakers read: "Nissan and Chrysler today announced a mutual agreement to end three OEM vehicle-supply projects announced last year." It continued to say that: "For the past several months, teams from both companies have been studying the viability of the projects in light of significant changes in business conditions since the projects were announced in January and April of 2008. Today, it was decided it was in the best interests of both companies to end the projects."

The OEM deal was set to focus around three projects that would have filled out key weak areas in the range for each of the participants. Firstly Nissan was set to provide to Chrysler a subcompact sedan for the South American market beginning this year based on its Versa model. Unlike its U.S. rivals General Motors and Ford, Chrysler has a very weak presence in South America. The Versa (known as the Tiida outside North America) was introduced by Nissan in 2004 to replace the Pulsar/Sunny models and arrived on the North American markets in 2006. It is built at many locations globally including at a Nissan owned factory in Mexico which would have provided the re-badged car for Chrysler. The Versa is the Japanese brand's entry-level model in North America.

Nissan were also set to build Chrysler's Dodge Hornet concept car for sale in global markets, with a particular focus on North America and Europe. The Dodge-badged Hornet project was developed under the carmaker's former ownership of DaimlerChrysler and presented in public in 2006. Curiously the Hornet, which was the smallest car that Chrysler had built, was shown fitted with a 1.6-litre supercharged Tritec engine that was sourced from the BMW-Daimler joint venture in South America which then passed into 100 percent Daimler ownership before it was sold by the German brand to Fiat Powertrain Technologies in a deal the pre-dated the Chrysler talks.

The third string to the proposed alliance would have seen Chrysler building a full-size pick-up for Nissan from 2011 to replace the Japanese carmaker's Mississippi-built Titan model. The Titan has been a commercial failure for Nissan, having never made any impression against the offerings from Chrysler, GM and Ford in the lucrative full-size pick-up segment and it currently captures less that two percent market share. Chrysler also announced yesterday that: "A separate agreement involving the supply of transmissions from Nissan affiliate JATCO to Chrysler remains unchanged. That agreement has been in effect since 2004."