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DaimlerChrysler and Hyundai Motor Company to Form Alliance

26 June 2000

DaimlerChrysler and Hyundai Motor Company to Form Alliance

    -- DaimlerChrysler to acquire a 10% stake in Hyundai Motor Company for
       $428 million

    -- 50/50 commercial vehicle joint venture

    -- DaimlerChrysler, Hyundai Motor Company and Mitsubishi Motor Company
       will develop and produce a range of world-class high quality small cars
       to compete in key global markets

    STUTTGART, Germany and SEOUL, South Korea, June 25 DaimlerChrysler and Hyundai Motor Company have agreed to form an alliance
under the terms of which DaimlerChrysler will acquire through today's
agreement, a 10 % stake in Hyundai for $ 428 million.
    A letter of intent and stock purchase agreement will be signed today in
Seoul by President Lee Kye-Ahn and President Kim Dong-Jin of Hyundai, and Dr.
Eckhard Cordes and Dr. Dieter Zetsche, Members of the Board of Management of
DaimlerChrysler AG.  The letter of intent will specify three key areas of
cooperation:

    -- a 50/50 joint venture for the development, production and marketing of
       commercial vehicles;
    -- an alliance for the development and production of passenger cars;
    -- to submit a non-binding bid for Daewoo Motor Company to investigate the
       merits for the alliance between Hyundai Motor Company and
       DaimlerChrysler.

    Juergen E. Schrempp, Chairman of DaimlerChrysler AG, said the alliance
would create exciting opportunities for DaimlerChrysler to produce and market
cars and commercial vehicles in Asia and other parts of the world.
    "Hyundai Motor Company is an ideal partner to expand DaimlerChrysler's
growing presence in Asia.  Hyundai is successful, profitable and by far the
strongest player in the Korean automotive market.  It has an excellent
distribution network throughout Asia and in particular the fast-growing ASEAN
countries.  The commercial vehicle joint venture will also further strengthen
our position as the number one commercial vehicle producer in the world,"
Juergen E. Schrempp said.
    Mr. Chung Mong-koo, Chairman of Hyundai Motor Company said the new
relationship would enable Hyundai to align itself with one of the leading
global automotive groups, while preserving its independence.

    Commercial Vehicle Joint Venture
    Under the terms of the commercial vehicle joint venture, Hyundai will
contribute its Korean production facilities and distribution network.
DaimlerChrysler for its part will primarily contribute state-of-the-art
technology.
    Hyundai anticipates annual sales of commercial vehicles in the year 2000
of more than 60,000 units, for a major market share in this sector in South
Korea.
    The joint venture, based on Hyundai's Chonju plant built in 1997, will
have an initial capacity of 80,000 to 100,000 vehicles annually.  This will
enable the company to expand beyond the Korean market and significantly
increase sales and market share of Korean made commercial vehicles in the
Asian markets, while at the same time improving the productivity and
profitability of the Korean operation.
    The joint venture will involve the production in Korea of
DaimlerChrysler's commercial vehicles for marketing and sale by the joint
venture, and utilize the companies' respective global distribution
capabilities to increase market share.
    It will also involve the sharing of technical systems such as fuel
injection, braking and safety systems, plus the exchange of drive train
components and selected engines.
    Hyundai's modern, state-of-the-art commercial vehicle plant in Chonju and
DaimlerChrysler's innovative technology represent an ideal platform for higher
and more profitable levels of production for worldwide markets.

    Small Car Architecture
    Together with Mitsubishi Motor Company, DaimlerChrysler and Hyundai plan
to develop and produce a range of world-class, high quality small cars to
compete in all key global markets, such as Asia, the North America, Latin
America and Europe.
    Mr. Chung Mong-koo also welcomed the opportunity under the alliance, to
join with DaimlerChrysler and Mitsubishi Motor in developing and producing a
new, world-class small car architecture.
    "Together with DaimlerChrysler and Mitsubishi Motors Corporation, Hyundai
Motor Company is now part of one of the strongest alliances in the automotive
industry.  This will enable us not only to increase competition in our home
market but also on a global base, " stated Mr. Chung Mong-koo.
    Juergen E. Schrempp added: "This alliance will allow us to extend the
range of competitive products we can offer our customers around the globe."

    Other Areas of Cooperation
    To achieve cost efficiencies, DaimlerChrysler and Hyundai will also
cooperate in the areas of future research, product development and global
supply chain management.  Additional joint ventures are under consideration in
areas such as financial services.  As well, further component production for
application in products of both companies is being investigated.
    DaimlerChrysler is one of the world's leading automotive, transportation
and services companies, selling products in over 200 countries with
manufacturing facilities in 34 countries.  Its passenger car brands include
Mercedes-Benz, Chrysler, Jeep(R), Dodge and smart. Commercial vehicles are
produced under the Mercedes-Benz, Freightliner, Sterling, Thomas Built and
Setra brands.
    The group also manufactures aircraft and equipment at DaimlerChrysler
Aerospace (Dasa), soon to be part of the European Aeronautic Space and Defense
Company (EADS), and offers financial and other services through
DaimlerChrysler Services (debis).  With approximately 470,000 employees,
DaimlerChrysler achieved 1999 total revenues of $151.0 billion.
    The South Korea-based Hyundai Motor Company (HMC), managed as a
stand-alone company, is one of the most successful automotive manufacturers,
not only in Asia but on a global scale.  Together with its subsidiary Kia
Motor, in which HMC acquired a 51% stake in 1998, HMC has a market share of
more than 70% in Korea for passenger cars, and 90% for commercial vehicles. In
1999, HMC achieved consolidated sales of $21.3 billion and an operating profit
of $843 million, which makes the company one of the most profitable automotive
manufacturers in the world.