FRANKFURT (Reuters) -- Daimler CEO Dieter Zetsche said a recent trip to Silicon Valley revealed that Apple and Google have made more progress on automotive projects than he had assumed.
Several automakers and Silicon valley companies are working on developing a self-driving car.
Google is testing prototype vehicles and is looking for industry partners John Krafcik, who leads Google’s car project, told the Automotive News World Congress earlier this month.
Daimler luxury brand Mercedes-Benz has responded to Google's project by developing an S-class sedan that drove 103km (64 miles) without needing any driver input.
Rumors have swirled that rival Apple is also working on a car, although the company has never confirmed this.
"Our impression was that these companies can do more and know more than we had previously assumed. At the same time they have more respect for our achievements than we thought," Zetsche told German weekly Welt am Sonntag.
Zetsche and a handful of senior managers met with about 70 companies in Silicon Valley, the paper said, without naming them.
"There were concrete talks. I will not say anything about the content. It was not just about the fact that there is an innovative spirit in the Valley. We know that already. We wanted to see what drives it, and all the things that can be created from it," Zetsche told the paper, explaining that they had also looked at start-up firms.
Zetsche said he expects Mercedes-Benz to post significant growth in the U.S. this year. Overall he sees the market for passenger cars growing between 1 percent and 1.5 percent in 2016, Welt am Sonntag said.
Separately, Zetsche said that officials from Germany's vehicle authority, the KBA, had spent three days testing various Mercedes and Smart models to see if their emissions violated emissions standards.
"To my knowledge, no conspicuous emissions levels were found," Zetsche told the paper.