Page last updated at 07:47 GMT, Thursday, 27 August 2009 08:47 UK

Nissan and Chrysler scrap tie-up

Chrysler vehicle
Chrysler has tied up with Fiat since the deal with Nissan was agreed

Carmakers Nissan and Chrysler have abandoned a plan to supply vehicles to each other because of the turmoil in the industry caused by the downturn.

The two firms agreed the swap deal last year, which would have seen Nissan supplying Chrysler with compact cars for global markets from next year.

In turn, Chrysler would have supplied Nissan with a pick up truck from 2011.

Since then, US carmaker Chrysler has filed for bankruptcy and has signed an alliance with Italian carmaker Fiat.

Japanese carmaker Nissan and Chrysler scrapped the plan "in light of significant changes in business conditions since the projects were announced".

A massive slump in demand for its cars led to Chrysler filing for bankruptcy in April this year.

In June, it signed a deal with Fiat, giving the Italian firm a 20% stake in Chrysler. As part of the deal, Fiat will supply its US partner with technology for small cars.

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