DaimlerChrysler Strengthens its Commercial Vehicles Business Alliances with Mitsubishi Motors Corporation and Hyundai Motor Company

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News of September 25, 2002

DaimlerChrysler Strengthens its Commercial Vehicles Business Alliances with Mitsubishi Motors Corporation and Hyundai Motor Company

DaimlerChrysler to hold 43 % in the Commercial Vehicle business of Mitsubishi Motors, plus 50 % in Hyundai Motors' Commercial Vehicle business
More direct access to the largest and fastest growing commercial vehicle market in the world.
Considerable potential for synergies through joint development, commonality of parts and major components

Stuttgart/Auburn Hills - The Supervisory Board of DaimlerChrysler AG, meeting in Auburn Hills, agreed that the company's alliance with Mitsubishi Motors Corporation (MMC) as well as its partnership with Hyundai Motor Company (HMC) in the area of commercial vehicles should be further strengthened. DaimlerChrysler will purchase 43 % of the spun-off commercial vehicle business of Mitsubishi Motors (purchase price approximately 760 million Euros). At the same time, the Board of Management is authorised to exercise its option, as contractually agreed with Hyundai Motor, to purchase a 50 % share of the spun-off commercial vehicle business of HMC by the end of the year (purchase price around 400 million Euros). The MMC Board of Directors approved the DaimlerChrysler share increase in Fuso at its meeting on September 20th, 2002.

DaimlerChrysler currently anticipates that its 43 % share participation in the Mitsubishi commercial vehicle business will be completed at the beginning of 2003. The exercizing of its call option in the Hyundai commercial vehicles division will be transacted by year end 2002.

Asia is the fastest growing market for commercial vehicles in the world, and is projected to account for over 50 % of the world market during the next decade. Currently, some 43 % of all commercial vehicles are sold in this region. The proposed investments will ensure that DaimlerChrysler's Commercial Vehicles Division can leverage the potential growth of these key Asian markets for further growth.

"We already laid the foundation for a leading position in Asia in the year 2000 with our MMC alliance and our partnership with HMC. Our joint ventures with such strong and profitable partners will enable us to enhance our position as the world's leading commercial vehicle manufacturer." (2001: 493,000 new vehicles manufactured; world market share 20 %); said Dr. Eckhard Cordes, member of Board of Management of DaimlerChrysler AG responible for the Commercial Vehicle Division. "By expanding in Asia, we can implement our strategy of 'turning scale into profit' - in other words reaping the benefits of economies of scale - even more rigorously," Dr. Cordes added. "We will thoroughly exploit the advantages we gain from our high unit sales figures and our global presence, where possible by:

collaborating closely in the field of development
using shared components and major assemblies
and utilizing common parts world-wide."

"Our investments in the commercial vehicle activities of MMC and HMC are therefore an integral part of our global business strategy," commented Dr. Cordes.

Mitsubishi Fuso Truck and Bus Corporation (MFTBC)

The agreement with Mitsubishi Motors assumes MMC's demerger of its current commercial vehicle division by early 2003 to form a separate company, which will be called "Mitsubishi Fuso Truck and Bus Corporation" (MFTBC). DaimlerChrysler will purchase 43 % of the shares in MFTBC for 760 million Euros. The Mitsubishi Group companies (primarily Mitsubishi Corporation, Mitsubishi Heavy Industries, Bank of Tokyo Mitsubishi etc.) will acquire a total of 15 %of the shares for around 265 million Euros. The remaining 42 % will be held by MMC.

MFTBC is headed up by a Board of Directors comprising nine members. DaimlerChrysler will nominate four members, to include the President and CEO of the new company, Wilfried Porth. Chairman of the Board will be Takashi Usami, currently head of MMC's commercial vehicles business. This transaction is subject to the approval of an Extraordinary General Meeting of MMC planned for the end of November.

Daimler Hyundai Truck Corporation

The Supervisory Board has also authorised the DaimlerChrysler Board of Management to exercise the option contractually agreed in June 2001 for DaimlerChrysler to take a 50 % share in the commercial vehicle business of HMC. DaimlerChrysler will purchase this share for around 400 million Euros. The new venture incorporated in the previously established "Daimler Hyundai Truck Corporation" (DHTC) - which includes the engine joint venture - will also produce trucks, buses and components. DHTC will be headed up by a board of management comprising eight members. DaimlerChrysler will be responsible for appointing four members - of these the Chief Operating Officer (COO) and the Chief Financial Officer (CFO).

DaimlerChrysler's Commercial Vehicle Division will thus gain direct access to a commercial vehicle producer which occupies the top position in the third largest market in Asia. DHTC is the clear market leader by a substantial margin, in the domestic Korean commercial vehicle sector. Additionally, both partners are already building an engine plant together in Chonju, which will commence production of the Mercedes-Benz 900 series in 2004.

This joint venture will also be accounted for by DaimlerChrysler using equity method. The 10 % share that DaimlerChrysler holds in HMC remains unchanged.

(Sept. 20, 2002)

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