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DaimlerChrysler and Hyundai to Continue Strategic Alliance

Agreement Allows DCX to Sell Hyundai Stake and Still Work Together

In an effort to keep its global market strategy alive DaimlerChrysler announced yesterday that it will be continuing its strategic alliance with Hyundai Motor Company.

The realignment will include the cooperative World Engine Project, a new-generation 4-cylinder development and manufacturing project which also includes Japanese automaker Mitsubishi, as well as various joint procurement activities. The decision

DaimlerChrysler has announced that it will continue its alliance with Hyundai. A future version of the Korean automakers Elantra will feature the engine produced by a JV between the two companies and Mitsubishi. (Photo: Trevor Hofmann, American Auto Press)

to continue working together does not save the commercial vehicle engine alliance, mind you, while DCX still plans to sell its 10.5 percent stake in the Korean manufacturer based on agreement between the

The alliance will include the cooperative World Engine Project, with a new 4-cylinder to replace Hyundais current 138 horsepower unit. (Photo: Trevor Hofmann, American Auto Press)

two companies that "successful cooperation on a per-project basis is possible without a shareholding relationship."

Hyundai will buy out DaimlerChryslers 50 percent stake in Daimler Hyundai Truck Corporation, a JV commercial vehicle engine plant already in operation in South Korea.

DaimlerChrysler has also committed to distribute Hyundai Motors Atos and Verna (Accent) passenger cars within Mexico market through

Much has changed in the auto industry in the past four years, so a new cooperation plan between the two companies was needed. The next-generation Dodge Neon will receive the new 4-cylinder engine co-developed with Hyundai and Mitsubishi. (Photo: Trevor Hofmann, American Auto Press)

an affiliate of the German automaker.

Lastly, DaimlerChrysler has agreed to supply Hyundai with medium duty engines (OM 906) for medium buses.

So why the need for the two automakers to rethink their strategic alignment? Since working together in September of 2000 much has occurred in the consumer automotive market and global commercial vehicle market. Rather than force each other to live with the original agreement, a strategy that would see both companies losing, a new cooperation allows DaimlerChrysler and Hyundai Motor to rethink and re-prioritize strategic objectives

The cooperation between the two companies will be on a per-project basis, starting with a replacement for Chrysler Groups aging 2.4-liter four. (Photo: Trevor Hofmann, American Auto Press)

based on the new economy.

On the subject Vice Chairman Kim, Dong Jin of Hyundai Motor stated, "We have been partners with DaimlerChrysler for nearly four years now and believe that the realignment of the strategic alliance is an important step forward to better position both companies to capitalize on opportunities in the changed market environment now facing us."

Dr. Eckhard Cordes, Member of the DaimlerChrysler Board of Management and Head of Commercial Vehicles Division added, "Over the last few years, we created multiple strategic options for sustainable and profitable growth of our business in Asia. We are now implementing the strategy with good progress. In light of these developments, DaimlerChrysler and Hyundai Motor have agreed to primarily focus on a collaborative relationship on a per-project basis in the future."

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