UPDATE 1-Nissan, Chrysler drop product-based tie-up

* Chrysler was to supply full-size pickup to Nissan

* Nissan was to provide global small car to Chrysler

DETROIT, Aug 26 (Reuters) - Nissan Motor Co Ltd (7201.T: Quote, Profile, Research) and Chrysler Group LLC said on Wednesday they have abandoned vehicle-supply projects announced last year that would have provided Nissan with a Chrysler-produced pickup truck.

Under the plans, Nissan would have provided Chrysler with a small vehicle for global markets starting in 2010 and a compact sedan for the South America market beginning this year.

The projects were announced in January and April 2008, but had been seen by analysts as facing obstacles after Chrysler announced an alliance with Fiat SpA (FIA.MI: Quote, Profile, Research) in January to provide the U.S. automaker with small cars.

Chrysler and Nissan said in February they had halted work on their product-based tie-up while both sides considered how to improve the projected financial returns on a deal announced in April 2008.

Chrysler filed for bankruptcy in the United States in April and its alliance with Fiat was cemented through that process. Fiat holds a 20 percent stake in the new Chrysler and controls management of the automaker.

Under the agreement, Nissan was scheduled to have supplied Chrysler with an all-new, fuel-efficient small car made in Japan in exchange for a full-size pickup truck made by Chrysler in Mexico.

(Reporting by David Bailey and Soyoung Kim; Editing by Richard Chang)