Disappointing sales results in western Europe over the past three years have prompted Nissan to review its strategy for the region and introduce more competitive models, according to European automotive analyst Thomas Ryard.

The Global Insight analysts, following newspaper reports in Japan at the weekend, said in a Monday research note that Nissan is considering expanding its production partnership with Suzuki to develop and manufacture - probably in India - an economical entry-level model that could be sold in Europe.

Ryard said sales of Nissan models in western Europe have declined gradually since 2004 despite the launch of the coupé-cabriolet Micra and new Note, a compact multi-purpose vehicle (MPV). The latest statistics from the European Automobile Manufacturers' Association (ACEA) showed that Nissan's sales in western Europe were down 18.9% year on year in the first nine months of 2006.

"Initially, the Japanese car maker benefited from its vehicles' good value for money in Europe, but its ageing and rather bland model line-up has caused a marked slowdown in sales," Ryard said.

Indeed, media reports last week said Nissan would not even bother selling its replacement for the Primera in the UK, even though it is built there. It would be sold in other parts of Europe, however.

Ryard said Nissan is bringing more new models to Europe, having already decided to introduce the new Qashqai (small SUV) and the Tiida, which effectively replaces the Almera, but also aims to become more competitive in high-volume segments, and is considering launching an economic small car in Europe.

The Indian-Suzuki angle makes sense. India is already a competitive export 'hub' for small Suzuki and Hyundai models.

In addition, through Maruti, Suzuki is set to start assembling vehicles for Nissan in India, Ryard noted. The Indian company is currently building a new plant in Manesar with a rated annual capacity of 350,000 units, and is planning to construct another plant in the same area that will exclusively produce Nissan vehicles.

Like its partner Renault, Nissan is looking to increase its presence in India, but has chosen to use its collaboration with Maruti to gain entry into the market. For its part, Renault is collaborating with Mahindra & Mahindra (M&M), which should start production of the Logan in 2007.

In June, Nissan and Suzuki announced plans to extend their existing alliance, whereby Suzuki currently builds the Nissan Moco minivehicle in Japan. As part of this plan, Suzuki would build a minivehicle-based compact car for Nissan that would be smaller than the Nissan March/Micra model, mainly for export to Europe, but with part of production allocated to the local market. This model - referred to as Nissan's A-Car—could also be produced in China. Maruti will also build another Nissan car for the local market at one of its factories. Suzuki has a 54% stake in Maruti.

Building on their partnership in Japan and India, Suzuki and Nissan are also talking about jointly producing vehicles in Russia and Brazil. Nissan is set to launch production at its St Petersburg (Russia) plant in 2009, and could use some of the capacity there to produce a model for Suzuki. Similarly, Suzuki is looking to make a comeback in Brazil and is studying the feasibility of having Nissan assemble its cars at the SJ Pinhais plant in the country, Ryard noted.

A Nissan GB spokesman said Nissan and Suzuki had officially announced collaboration in manufacturing.

Any reports or suggestions regarding specific models were "speculation" as the automaker does not comment on forward model plans until the vehicles are "officially" announced, he added.