The talks focus on pickups, small cars and engines, said the people, who don't want to be named because the negotiations are private. Nissan wants to tap Chrysler's expertise with large trucks, while Chrysler, acquired five months ago by buyout firm Cerberus Capital Management LP, seeks access to Nissan's small cars.
A deal may help both companies save money as Chrysler battles two years of losses and Nissan confronts a 16 percent decline in its stock price this year. It would add to a growing list of partnerships aimed at expanding product lineups and keeping assembly plants running with minimal investment.
``Collaborating is going to be a way of life,'' said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan. ``Costs are high. You have GM and Toyota with global economies of scales. That ramps up the pressure dramatically.''
Nissan said this week it will build small pickups for Suzuki Motor Corp. in the U.S. next year, while Chrysler plans to assemble minivans for Volkswagen AG in Ontario.
Nissan and Chrysler aren't considering buying equity stakes in each other, the people said. Nissan spokesman Simon Sproule in Tokyo and Chrysler spokeswoman Lori McTavish in Auburn Hills, Michigan, declined to comment.
Chrysler Chief Executive Officer Robert Nardelli told employees this month that the company's losses may rise to $1.6 billion this year, people with direct knowledge of his statements said last week.
Chrysler had a 2006 loss of $680 million using international accounting standards, or $1.5 billion using traditional U.S. accounting rules.
Nissan, under CEO Carlos Ghosn, boosted operating profit the most in at least three years in its latest quarter, to 218.7 billion yen ($1.9 billion). It was helped by increased sales in Russia, China and the Middle East.
Nissan fell 0.9 percent to 1,192 yen as of the 11 a.m. trading break on the Tokyo Stock Exchange.
Ghosn said as recently as October that he still wants a U.S. partner, after General Motors Corp. rejected an alliance 14 months ago. GM spurned the idea after three months of study with Nissan and Renault SA, the French automaker that owns 44 percent of Nissan and is also led by Ghosn.
That proposal focused on the savings each company could achieve by combining operations in areas such as purchasing.