Chrysler may become the main production source for a new engine family it is co-developing with Mitsubishi and Hyundai.
Chrysler CEO Dieter Zetsche said the partners are studying whether the DaimlerChrysler division should supply all Mitsubishi and Hyundai vehicles sold in North America with the four-cylinder engines, as well its own models.
That's a potential of 900,000 or more engines a year. It is unclear whether Chrysler could build that many in existing engine plants or if new capacity would be needed.
Chrysler, Mitsubishi and Hyundai created a joint venture last month to develop and build 1.5 million 1.8-, 2.0- and 2.4-liter gasoline engines a year, but did not say who would be responsible for producing them (see story, Page 4). The three partners equally own the joint venture, called the Global Engine Alliance.
Hyundai will use the engines first in vehicles due in 2004. Chrysler and Mitsubishi will start in 2005.
In the USA, Chrysler would be the biggest user of the engines, particularly the larger 2.4-liter displacement. That is why Chrysler may take the manufacturing lead, Zetsche said.
Hyundai developed the engines, although Zetsche said Chrysler is changing many key features, including cylinder bore.
He said Chrysler sent an engineering team to Hyundai in Korea. Two weeks ago, Chrysler appointed a top executive to head a team to study possible manufacturing sites.
Chrysler's biggest engine production plant is in Saltillo, Mexico. It is set to make 18,300 2.0-liter engines and 343,000 2.4-liter engines this year.
Chrysler will use the new engines in vehicles it and Mitsubishi are developing together. The new models include replacements for the Dodge Neon (known as the Chrysler Neon in Europe) and the Mitsubishi Eclipse and Lancer. The two companies are also working large-car successors to the Chrysler Sebring/Dodge Stratus and the Mitsubishi Galant and Spyder.
DaimlerChrysler has a 37.3 percent stake in Mitsubishi and a 10 percent stake in Hyundai.