Nissan set to supply Chrysler with small cars: report

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The two companies are in the final stages of negotiations on a deal for Nissan to supply Chrysler with a model with an engine displacement of around 1.8 liters, it said on its website.

TOKYO (Reuters) - Nissan Motor Co <7201.T>, Japan's third-biggest automaker, is set to supply Chrysler LLC with fuel-efficient small cars, Japanese broadcaster NHK reported on Thursday.

The two companies are in the final stages of negotiations on a deal for Nissan to supply Chrysler with a model with an engine displacement of around 1.8 liters, it said on its website.

Nissan and Chrysler, which was acquired this year by Cerberus Capital Management LP <CBS.UL>, are in talks to supply cars, trucks and engines to each other, a source said last month.

Nissan spokeswoman said negotiations with Chrysler are still ongoing and nothing has been decided.

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Both Nissan and Chrysler have similar original equipment manufacturing (OEM) deals with other carmakers aimed at saving development costs in an increasingly competitive industry.

Over a year ago, Nissan and its French partner Renault SA <RENA.PA> broke off talks with General Motors Corp <GM.N> over a comprehensive three-way alliance.

While Nissan-Renault Chief Executive Carlos Ghosn has said the alliance could still seek a U.S. partner in future, the discussions with Chrysler are on a smaller, product-by-product level, the source said.

(Reporting by Edwina Gibbs)