Hyundai rejects DaimlerChrysler China proposal

SEOUL (Reuters) -- Hyundai Motor Co. said today that it had rejected a proposal by DaimlerChrysler AG to jointly build an engine plant in China, contradicting a local newspaper report.

"Hyundai was approached by DaimlerCrysler over possible joint investment in China but the talks fell apart late last year as we saw few benefits from the venture," a Hyundai Motor spokesman in Seoul said.

He made the comments after a South Korean newspaper reported today that DaimlerChrysler CEO Dieter Zetsche said the carmaker is in talks with Hyundai on building a joint Chinese engine plant.

Zetsche said in an interview with the Chosun Ilbo newspaper on the sidelines of the Detroit auto show that the firm is also willing to cooperate with South Korean car parts makers in China.

The newspaper said DaimlerChrysler's joint engine plant plan with Hyundai was seen as part of the German automaker's efforts to cut costs.

The Chrysler group is readying a cost-cutting plan to be announced in February with a goal of cutting $1,000 from the cost of each car it produces.