Niassan in trouble after Suzuki-Volkswagen deal

Nissan Motor, Japan’s thirdlargest automaker, said it may need to find a new partner to manufacture its European small cars after Volkswagen bought a stake in Suzuki Motor, which supplies Nissan’s Pixo model.

“We don’t know yet whether that strategy is still good with Suzuki joining Volkswagen,” Nissan executive vice-president Colin Dodge said in an interview. “A lot of people believe not, and we’re thinking about it.”

Halting the Pixo would leave Nissan without a small, low-cost European model to compete with Fiat SpA’s Panda and Volkswagen’s Lupo in one of the few vehicle categories that is still growing. It would create a new hole in Nissan’s product planning after Chrysler backed out of a deal last year to supply cars and pickups. That commitment was canceled after Fiat bought a controlling stake in the US carmaker.

A spokesman for Suzuki, Takuma Mizuyoshi, couldn’t immediately be reached for comment. Volkswagen, Europe’s largest carmaker, had no comment on whether the German manufacturer would try to cancel the Suzuki-Nissan partnership, according to spokesman Michael Brendel. Yokohama-based Nissan hopes the supply deal will continue and doesn’t have the volume or vehicle designs to make European city cars profitably itself, Dodge said.

The Pixo, a version of Suzuki’s Indian-made Alto model, plugged a gap at the bottom of Nissan’s European lineup when it was introduced in April as government incentives accelerated a shift in demand toward smaller, fuelefficient cars.