• Kyodo

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DaimlerChrysler AG plans to set up a joint venture with Mitsubishi Motors Corp. and South Korea’s Hyundai Motor Co. to produce midsize vehicle engines, local German media reported Thursday.

It is the first time the three strategic partners have put forward a joint production plan, apparently aimed at slashing development and manufacturing costs, since DaimlerChrysler took stakes in Mitsubishi and Hyundai in 2000.

The German auto giant is expected to announce the details of the plan, including the investment ratios of the joint venture next week, according to the local reports.

Engines manufactured at the planned venture will be used for the three automakers’ midsize cars to be sold on world markets.

But they will not be used in Mercedes-Benz models, which enjoy high brand recognition.

DaimlerChrysler already announced that it will launch joint production of the Smart minivehicles with Mitsubishi in 2004. It also said it will standardize the chassis of Mitsubishi and Chrysler small and midsize vehicles as well as minivans.

With Hyundai, DaimlerChrysler’s collaboration has so far been limited to fields such as truck engine production. But it is seeking to expand ties with Hyundai as well as with MMC.

DaimlerChrysler holds a 34 percent stake in MMC and a 10.46 percent stake in South Korea’s auto giant.

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