Chrysler Mulls Nissan/Renault Pact: Report

Chrysler may join an existing manufacturing and development alliance between Japan's Nissan(NSANY Quote) and France's Renault, the Wall Street Journal reports.

However, a sale of the auto maker to General Motors(GM Quote) is still the preferred path, the newspaper reports, citing people familiar with the matter.

Cerberus Capital, Chrysler's majority owner, is discussing having Nissan, and possibly Renault, acquire a minority stake in Chrysler. It's not clear if Chrysler or Cerberus would be asked to purchase an interest in the Japanese and French auto makers in order to maintain a cross-shareholding relationship, the Journal reports.

For now, Cerberus prefers a deal in which GM takes control of Chrysler. But GM has been unable to secure financing for a deal amid continued credit-market worries and the immediate costs of such a merger. As a result, Cerberus is continuing to pursue the option of having Chrysler team up with Nissan, according to the Journal.

Meanwhile, the Associated Press reports Nissan plans to cut auto production at two plants in Japan because of sluggish sales in the U.S.