May 6, 2002
DaimlerChrysler, Hyundai and Mitsubishi form alliance to build engines
Stuttgart, Germany; Seoul, South Korea; Tokyo, Japan – DaimlerChrysler AG, Hyundai Motor Company and Mitsubishi Motors Corporation announced the formation of a joint venture company for the design, development and engineering of a new family of in-line four cylinder gasoline engines.
Global Engine Alliance L.L.C. will jointly develop these engines through the combined resources of all three companies. The engines will be used in future generations of vehicles of the Chrysler Group, Mitsubishi Motors and Hyundai Motor.
Chrysler Group President and CEO Dieter Zetsche said, “For Chrysler Group, this project represents tangible fruits of the alliance with Mitsubishi and Hyundai. Leveraging our company’s global scale is a critical element in the Chrysler Group growth strategy; a venture like this could well lead to even greater cooperation.” Hyundai President Kim Dong-Jin expressed his satisfaction by stressing that Hyundai, “looks forward to this opportunity to create a strong working relationship with our partners in continuing advances in this engine technology.” Mitsubishi Motors President and CEO Takashi Sonobe emphasized that, “this joint venture is another proof for the ongoing progress of our successful alliance with DaimlerChrysler.”
The new joint venture company will be owned equally by all three companies and will be located in the United States. By combining resources, the engine will have the most competitive technologies of the Chrysler Group, Hyundai and Mitsubishi. Each company will produce the world-class engine for future vehicles. Under the new joint venture, Hyundai will have the lead responsibility for implementing the decisions of the joint venture company for design development and engineering.
The engine will be a state-of-the-art aluminum engine with displacements of 1.8, 2.0 and 2.4 litres in the range of 125 to 160 horsepower. With this range of displacement, each company will utilize the engine in a wide variety of vehicles for various market segments. The modern aluminum design will enhance fuel efficiency and provide improved performance.
Each company will produce the engine for its own vehicles with the total production of engines expected to approach 1.5 million units annually, making this engine one of the most utilized in the industry. The companies expect that through sharing a common design, the aggregate volume will provide opportunities for synergies based on economies of scale that will benefit each company.
With the signing of the joint venture agreement, the new company will begin operations in May 2002. Initial production of engines by Hyundai is expected by March 2004, with Chrysler and Mitsubishi engine production planned to start in 2005. The companies have also agreed to investigate the possibility of joint production of the engine in the NAFTA region in the immediate future.