Chrysler is still considering a new North American plant to make passenger car engines designed with its Asian partners Mitsubishi Motors and Hyundai Motor, the Detroit News reported.

According to the newspaper, Chrysler CEO Dieter Zetsche said his company wants to begin building a four-cylinder engine as early as 2005, probably near existing plants in Michigan or Ohio.

The company expects to make more than 500,000 of the 1.8- to 2.4-litre engines a year, the Detroit News said.

"We haven't made a site selection so far, which potentially keeps an option of making it part of an existing plant or location as well, so this is an open issue so far," Zetsche told the Detroit News. "If you would look for locations driven by logistics then obviously you would have to go someplace in the Detroit area or Ohio."

The Detroit News said that DaimlerChrysler, Mitsubishi Motors and Hyundai Motor formed an alliance in May to develop four-cylinder engines, with plans to produce as many as 1.5 million units worldwide beginning in 2004.

Hyundai Motor, partly owned by DaimlerChrysler, plans to begin assembling the four-cylinder engine in March 2004 in South Korea, the newspaper added.

Chrysler, Hyundai and Mitsubishi haven't decided whether to combine production of the engine in the United States at a single factory that could supply all three companies, Zetsche told the Detroit News.

"The US is the only place where we might consider whether it makes sense or whether it's possible to go beyond the engineering and development joint venture into any kind of manufacturing joint venture, but that's open," he added, according to the newspaper.

"If we would decide for that, it would just apply to the US because obviously the opportunity doesn't exist in" Korea and Japan, the Detroit News quoted Zetsche saying.