Consumers Benefit From Auto Maker Partnership Proliferation

FRANKFURT – Increasing marketplace competition and the staggering costs associated with developing new vehicles will inspire more partnerships between auto makers, but consumers still will have viable choices, says DaimlerChrysler AG's new chairman.

But Dieter Zetsche rejects any notion that brand integrity will be compromised, though the range of cooperation is boundless.

“It might be components, it might be platforms,” Zetsche tells journalists in a wide-ranging interview at the auto show here. “Then you can differentiate…like we will do with the hybrid.”

Last month, DaimlerChrysler announced it had reached a deal to develop hybrid-electric powertrain technology with General Motors Corp. And there is a memorandum of understanding that BMW AG, archrival of Mercedes-Benz, will finalize plans to join the partnership by year's end. (See related story: BMW Joins GM, DC Hybrid Program)

Mercedes Direct Hybrid

Yet, despite his conciliatory tone, an unsettling atmosphere hangs over the BMW deal - charged by the auto makers' long-standing rivalry for luxury market supremacy. Zetsche maintains he is unfazed by the agreement.

“Of course, we are fierce competitors when it comes to the customer, but we have many common interests and common opportunities underneath that level. It would be stupid not to look into those opportunities.

“I have no issue whatsoever to deal with our competitors, when this (is) done in the presence of lawyers,” he adds wryly.

Meanwhile, Mercedes reveals a pair of concept hybrid-electric vehicles (HEVs). The Direct Hybrid is based on a '06 S-Class with a 3.5L V-6 gasoline engine as the primary power source.

Classified as a “mild” hybrid because its electric motors supplement the engine's boost, it delivers a 25% improvement in fuel economy, the company says.

The Bluetec Hybrid, also based on a new S-Class, features a 3.0L V-6 diesel with a new exhaust gas purification technology that reduces troublesome nitrogen oxide emissions by 80%.

“This technology makes the Bluetec Hybrid the cleanest diesel in the world,” the auto maker claims.

Innovations such as these are the price of admission for auto makers as more competitors enter the market every year, largely driven by the industry's growth in Asia. So the challenge to develop new products more quickly is intensified.

Partnerships, such as the DC-GM-BMW hybrid agreement, will help increase speed-to-market while keeping a tight rein on cost.

“It's an industry development,” Zetsche says of the trend. “Under the tremendous competitive pressure, more and more companies realize that. That applies to us as well. I'm very open for this.”

DaimlerChrysler also currently is discussing the feasibility of building a minivan for Volkswagen AG, based on the popular Chrysler platform.

However, neither Zetsche nor Chrysler CEO and President Tom LaSorda were willing to shed any light on the prospect of a deal between the two companies, confirming only that talks are continuing. (See related story: VW-Chrysler Minivan Plausible: Zetsche)

But on the heels of a successful weekend of Formula One, in which the McLaren-Mercedes camp won the Belgian Grand Prix, Zetsche does say his company's relationship with its racing partner is strong, although he is non-committal on plans to offer another McLaren-inspired street car to succeed the McLaren SLR. (See related story: Mercedes McLaren SLR Inspired by Vision)

And the relationship will remain strong, despite the enormous investment, as long as the program is competitive. “The only objective is successful presence,” Zetsche says. “If where we are assures that objective, I'm fine. If not, it could change.”

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