Automotive News Europe DaimlerChrysler and Hyundai Motor Co. plan to launch a range of light and heavy commercial vehicles under a new brand name.
The new range will include a medium van to challenge established leaders such as the Ford Transit and the Renault Master.
Europe and North America will be the first targets for the new range.
Longer term, the new D/C and Hyundai brand will enter markets in China and southeast Asia.
The new vehicle range is expected to be announced later this month or early next month. The brand name will likely be an amalgamation of the DaimlerChrysler and Hyundai names.
In June, the two companies announced plans to form a strategic alliance. DaimlerChrysler agreed to buy a 10 percent stake in Hyundai Motor. The two companies also formed a 50-50 joint venture in commercial vehicles.
Hyundai Motor President Kim Dong-Jin, who masterminded the D/C alliance, said: 'In five months we have accomplished a lot - particularly in terms of gaining an understanding of the culture of the two companies.'
Hyundai, Korea's No. 1 carmaker, wants to improve its global presence.
Kim said: 'DaimlerChrysler is aware of the position Hyundai holds in the Korean and Asian markets in terms of marketing and price, while it can bring improved production techniques, cost efficiencies and quality to the equation.'
Kim said there is no possibility of Hyundai producing Mercedes-Benz vehicles at its Chonju commercial vehicle plant in South Korea.
'What we will see is a new brand emerging that takes something from both the Hyundai and DaimlerChrysler names,' he said.
Joint company operations are expected to start in 2001, ramping up over the next two years.
Kim said: 'For the immediate future Europe is a major target [for the new commercial vehicle range].
It is a market we have not been able to tap because of emissions regulations, but we expect to build our presence with the new Powertech engines and new technology from DaimlerChrysler.
'We believe we can achieve sales of between 15,000 and 25,000 over the next few years in Europe with the right product at the right price.'
The new range would not take sales away from existing Mercedes-Benz commercial vehicles, Kim said.
Hyundai is expected to build Mercedes-Benz diesel engines under license. Hyundai has completed development of its 13.0-liter Powertech diesel engine that will equip heavy commercial vehicles in the new range. It also has a small four-cylinder, 1.5-liter engine under development. But to meet short-term requirements Kim said Hyundai is discussing the possibility of building four- and six-cylinder Mercedes engines in Korea.
He added: 'We have had discussions with a number of possible partners about engines but the best solution would be to license production [of Mercedes engines]. We expect to be able to achieve this as one of the synergies of our alliance.'
Hyundai's Chonju plant is the largest commercial vehicle plant in Asia, and the most modern. It has been in operation for four years and has a current output of 60,000 vehicles a year. The goal with D/C is to maximize utilization and reach production capacity of 100,000 vehicles a year.
Hyundai currently builds light commercial vans, trucks from 3.5 tons to 20 tons, plus shuttle, city and express buses. It holds 63 percent of the domestic Korean commercial vehicle market, selling 50,000 vehicles a year. Major export markets are the Middle East, Latin America, southeast Asia and North Africa.
For the new commercial vehicle range, Kim said the Chonju plant must improve quality and cost efficiencies, and maximize parts sharing. That would mean raising the quality among suppliers, he said.