Hyundai Motor and DaimlerChrysler Break Ground for New Commercial Vehicle Engine Plant

SEOUL, Korea, Nov. 14, 2002; Hyundai Motor Co.'s and DaimlerChrysler AG's joint venture to build commercial vehicle engines took another major step forward today as the two partners broke ground for the construction of their new engine plant located in Hyundai Motor's Chonju Commercial Vehicle Plant.

The two companies announced on July 26th of last year the formation of a new 50:50 engine joint venture named Daimler Hyundai Truck Corp.

The 34,000sq.m. Daimler Hyundai Truck plant represents an investment of KW30 billion (US$230 million) including engine development as well as plant tooling costs. It will produce DaimlerChrysler's newest 900 series diesel engines at the rate of 50,000 units annually when it becomes fully operational by 2005. Pilot production is scheduled to begin in September 2003.

Over 300 guests attended the groundbreaking ceremony including Hyundai President Dong-Jin Kim and Senior Executive Vice President Choong-Yong Kim, head of Hyundai's Commercial Vehicle Division. Representing DaimlerChrysler were President Eckhardt Cordes of the Commercial Vehicle Division and Vice President Rudiger Grube of strategic planning.

"Each company brings unique merits to the partnership and this new plant is just the beginning of the great synergies both Hyundai and DaimlerChrysler are beginning to enjoy as a result of our collaboration," said President Kim Dong-Jin. "The new plant will deepen our relationship and enable our two companies to offer the most competitive diesels engines in the world," he added.

DaimlerChrysler President Cordes said, "I'm extremely proud of our partnership with Hyundai Motor. This project will be mutually advantageous for DaimlerChrysler and Hyundai."

The 900 series engine incorporates the very latest in diesel engine technology and offers a 10 percent improvement in fuel economy over the previous generation engine. It's also fully Euro 3 compliant.

The plant will manufacture the 900 engines in a 4.3-liter four-cylinder version as well in six-cylinder 6.4- and 7.2-liter displacements. The engines, to be fitted on the range of Hyundai Motor trucks from 2.5-tons to 14-tons as well as buses, will boost the export competitiveness of Hyundai commercial vehicles and will be instrumental in helping realize Hyundai's long-term goal of joining the ranks of the world's top five automakers by 2010.

Hyundai, DaimlerChrysler and Mitsubishi Motors are already cooperating on the design, development and engineering of a new family of inline four cylinder passenger car engines which will be produced by all three makers starting with Hyundai in 2004.

Hyundai Motor is Korea's leading automobile manufacturer and along with Kia has a 90 percent share of the Korean commercial vehicle market. In 2001, Hyundai and Kia sold 54,539 commercial vehicles around the world. Hyundai Motor recorded total sales of more than 1.5 million vehicles and posted earnings of US$14.5 billion.

DaimlerChrysler holds a 10.5 percent stake in Hyundai Motor and is the world's leading manufacturer of commercial vehicles.