New Chrysler, Mitsubishi, Hyundai Plant to be Located in the U.S.

Chrysler, Mitsubishi, Hyundai Announce New JV Engine Plant

The new engines will be used for North American built small cars from Chrysler Group, Mitsubishi and Hyundai, but won't likely be ready until another model generation. 2003 Dodge SX 2.0 shown - models not included.

Talk about combining forces, DaimlerChrysler AG has formed a joint venture with Mitsubishi Motors Ltd. and Hyundai Motor Co. Ltd. to operate a new engine plant in the United States, Chrysler CEO Dieter Zetsche announced Thursday during a media preview for the Los Angeles auto show.

The JV, brought to fruition last month, seals a previously announced deal the will see the three companies cooperatively design and build up to 1.5 million 4-cylinder engines in Japan, Korea and the U.S. While only holding 10% of Hyundai the DaimlerChrysler owns a controlling stake in Mitsubishi.

Chrysler Group's CEO Dieter Zetsche has stated his company will lead the new plant's operations.

Hyundai and Mitsubishi will open doors to more U.S. customers while DaimlerChrysler will reduce manufacturing costs by sharing common components, a win, win, win situation.

Due to its joint venture status the new plant will not be tallied as a Chrysler asset, part of Zetsche's initiative to lower the company's asset base and thus reduce depreciation costs.

Zetsche didn't have any details regarding the plant's new location but said the news would be made public within three months. Once under way, expected to be in 2005, the plant will be capable of approximately 600,000 engines per year.

DaimlerChrysler, being the largest of the three, will be sharing ownership equally with its Japanese and Korean partners, but Zetsche did say his company would Chrysler would lead plant operations.

The three companies won't be exporting the U.S. built engines, but will be fitting them to North American produced Chrysler Group, Mitsubishi and Hyundai vehicles.