Nissan, Suzuki may supply vehicles to one another  ( May '31,2006, Daily News & Analysis)

Nissan Motor Co and Suzuki Motor Corp are considering strengthening their alliance by supplying vehicles to each other to reduce development costs, Japanese media reports said on Tuesday.

Nissan may procure more minivehicles from Suzuki and supply 2-litre midsize cars to Suzuki through original equipment manufacturer (OEM) arrangements, the business daily Nihon Keizai said. The Yomiuri newspaper reported that the cross-OEM would likely begin by the end of this business year next March.

A Nissan spokeswoman and a Suzuki spokesman declined to comment on whether the two companies were in talks to expand their OEM arrangements.

Nikko Citigroup said in a report on Tuesday that if the media reports are true, it would be positive for both car makers. The brokerage said the alliance should help Suzuki to expand its product line-up.

Nissan chief operating officer Toshiyuki Shiga said on Monday that Japan's second-biggest auto maker may need to consider strengthening its minicar lineup to prop up sales in the tough domestic market.