Chrysler Corp. has dropped its antitrust lawsuit against the joint venture by General Motors Corp. and Toyota Motor Corp. to build subcompact cars in the United States, spokesmen for the three companies said yesterday.

The suit was aimed at stopping New United Motor Manufacturing Inc., a GM-Toyota company set up to produce 250,000 subcompact cars annually at a former GM plant in Fremont, Calif.

Chrysler vehemently objected to the joint-venture plan on the ground that it combined the resources of two of the world's biggest auto makers -- thus giving an unfair competitive advantage to both GM and Toyota in the U.S. auto market. GM is the world's largest car builder and Toyota is the third-largest.

The terms of the GM-Toyota agreement would have allowed the two companies to work together for up to 12 years. But officials of all three companies said yesterday that the contract's life has been reduced to eight years as the result of an out-of-court settlement reached Thursday in Washington.

GM's publicly stated rationale for entering the joint venture was that it needed to learn from the Japanese how to produce small cars efficiently.

Toyota's reasons revolved around the notion that NUMMI would give it a presence in U.S. manufacturing that could help abate rising support for mandatory trade restrictions against Japanese auto exports to this country.

GM has since launched Saturn Corp., a new company designed to surpass the Japanese in the very production methods that GM said it needed NUMMI to learn. Saturn is expected to begin small-car production by 1990.

Toyota, meanwhile, has come under tremendous pressure to establish a plant of its own in the United States in order to maintain market share. Honda Motor Corp. and Nissan Motor Co. Ltd. already have built U.S. assembly facilities, and are using production from those plants to augment their export sales in the United States. Mazda Motor Corp. also has announced its intention to start building cars in this country.

Maryann N. Keller, a director of and analyst with New York-based Vilas-Fischer Associates, said yesterday that she expects Toyota to announce by next summer its plans to build a plant in the United States. Toyota officials would not comment.

As for Chrysler, company officials there were denying yesterday that they are near entering a joint-production agreement with Mitsubishi Motors Corp. Such an agreement would be similar to the one involving GM and Toyota.

The out-of-court settlement "has nothing to do with our discussions with Mitsubishi about a joint venture," said Chrysler spokesman Baron Bates.

But Bates said that Chrysler Chairman Lee A. Iacocca will arrive in Japan today "for meetings with various government and industry officials, including those officials at Mitsubishi."

Iacocca's primary purpose in going to Japan is to address the American Chamber of Commerce in Japan in an engagement that had been scheduled "months and months before" Chrysler's decision to drop its antitrust suit, Bates said.