Hyundai Motor Co.'s and DaimlerChrysler AG's joint venture to build commercial vehicle engines took another major step forward last week as the two partners broke ground for the construction of their new engine plant
located in Hyundai Motor's Chonju Commercial Vehicle Plant in Korea.
Last year, the two companies announced the formation of a new engine joint venture named Daimler Hyundai Truck Corp.
The Daimler Hyundai Truck plant represents an investment of $230 million, including engine development and 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.
More than 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 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 latest in diesel engine technology and offers a 10% 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 will be fitted on a range of Hyundai Motor trucks, from 2.5-tons to 14 tons, as well as buses.
Hyundai Motor is Korea's leading automobile manufacturer and, along with Kia, has a 90% share of the Korean commercial vehicle market. Last year, 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 $14.5 billion.
DaimlerChrysler holds a 10.5% stake in Hyundai Motor and is among the world's leading manufacturers of commercial vehicles.