DaimlerChrysler, GM join forces on hybrids

DaimlerChrysler and General Motors will jointly develop new hybrid motors to compete against Japanese rivals on the fuel-saving technology that reduces harmful emissions, the companies said on Monday.

The goal is to make advanced hybrid propulsion systems that will improve acceleration and fuel economy for GM, Chrysler and Mercedes Car Group vehicles, according to a joint statement.

The accord teams GM, the world's biggest carmaker, and German-American DaimlerChrysler, the global number five, against rivals including Toyota Motor Corp. and Honda Motor Co. who have a head start in the hybrid market.

"The wide-ranging programme will allow opportunities for additional partners, and could become a hybrid source for other auto manufacturers," the statement said.

GM intendeds to put hybrids into its full-sized Chevrolet Tahoe and GMC Yukon SUVs in late 2007. DaimlerChrysler's US arm Chrysler will offer a range of hybrids, the first of which will be featured in its Dodge Durango SUV, to come on the market shortly after GM's hybrid SUVs.

Daimler's premium Mercedes-Benz brand will focus on high-tech hybrid systems in rear-wheel-drive luxury cars.

Hybrids use an electric motor and an internal combustion engine so cars run on battery power at low speeds. The batteries recharge automatically and capture energy from braking.

DaimlerChrysler stock gained 1.98 per cent to 35.05 euros by 1335 GMT while the DJ Stoxx European car sector index rose 1.1 per cent.

Toyota's Prius passenger car has emerged as the most popular hybrid. Customers in the United States often have to wait half a year or longer to get one.

Other models available in the US market are Honda's Civic and Insight, which in 1999 became the first petrol-electric car to be sold in the United States, and Ford Motor Co.'s Escape sport utility vehicle, which uses Toyota technology.

"There is no doubt that Toyota is about five years ahead of everybody else, so everybody else is late in the game," said Graeme Maxton, managing director of consultancy Autopolis.

"The big question is whether this is a fad for a little while and people get fed up with it or whether it really will become something where people will say 'I want to be environmentally aware'. The fuel savings are not that great for the price you have to pay up front extra," he added.

One key factor will be whether legislation in major car markets promotes use of hybrids at a time when tougher clean air standards make improving fuel economy a crucial goal.

Maxton said hybrid technology was not just an interim solution until zero-emission hydrogen-powered cars arrive.

"The general consensus is that because of Toyota's leadership in it and because of the technology now this is not just a small stepping stone. This is going to be a big stepping stone which could last 20 years," he said.

GM and DaimlerChrysler will work on what they call "two-mode full hybrid" technology.

"Together we will jointly develop what is essentially an electrically variable transmission with two hybrid drive modes," said Tom Stephens, group vice president of GM Powertrain.

"This system will reduce fuel consumption at highway speeds much more effectively than available single-mode systems and achieve at least a 25 per cent improvement in composite fuel economy in full-size truck applications."

The new system aims to improve performance and fuel economy at highway speeds and better trailer towing ability. The system's electric motors are designed to fit within the approximate space of a conventional automatic transmission.

The development team will be based in Michigan.

- REUTERS