• Construction to start in the spring of 2002, investment of around 240 million Euro
• Some 500 new jobs to be created at the engine plant
• EU Commission approves approximately 57 million Euro in subsidies
• Takashi Sonobe, CEO of Mitsubishi Motors: "This joint project is a very important step in our alliance with DaimlerChrysler."

Tokyo - DaimlerChrysler AG (Stuttgart) and Mitsubishi Motors Corporation (Tokyo) have announced they will build a joint engine plant for the production of gasoline engines for small cars under the Mitsubishi and smart brands.

The plant will be located in Koelleda, in the German state of Thuringia, and represent an investment totaling 244 million Euro. Altogether, around 500 people will work at the plant in Koelleda. Construction will start in February 2002. Plans call for the plant to have production capacity of up to 300,000 engines annually, on the 37,000 square meters of production space. The plant is scheduled to complete in December 2003 and the first engines are expected to be ready for delivery in the spring of 2004.

The EU Commission in Brussels today announced its decision to approve subsidies from the Federal Republic of Germany and the state of Thuringia. These funds, which will help improve the regional economic infrastructure, will be used to build the plant. The German federal government and the state of Thuringia will provide a total of 57 million Euro in subsidies.

DaimlerChrysler and Mitsubishi Motors will establish "MDC Power GmbH," a joint venture company in which each partner will have a 50-percent stake. The joint venture company will produce the modern three- and four-cylinder state-of-the-art engines, which will be compatible with EU4 regulations. These engines are intended for use in Mitsubishi and smart-brand vehicles, which are to be assembled at the NedCar plant in the Dutch town of Born. Some of the engines produced in Koelleda will be sent to the Mitsubishi Motors in Japan.

Schrempp: Milestone in alliance with Mitsubishi

"Coming only 21 months after the announcement of our alliance with Mitsubishi Motors Corporation, the decision to build the new engine plant in Koelleda is an important milestone in our cooperative efforts with our Japanese partner," said Juergen E. Schrempp, Chairman of the DaimlerChrysler Board of Management. He said that the decision in favor of Thuringia would do more than just generate economic momentum in the region; it would also act as a signal to emphasize Germany's potential and its competitiveness as a business location.