DaimlerChrysler has confirmed it will sell its 10.5 % stake in Hyundai Motor.

A joint statement said that both companies have agreed that successful cooperation on a per-project basis is possible without a shareholding relationship.

In what is being billed as a "realignment" of their alliance, Hyundai Motor has also agreed to buy DaimlerChrysler's 50% stake in Daimler Hyundai Truck Corporation, an existing commercial vehicle engine joint venture in Korea.

The statement said the changes to the strategic alliance are "to better reflect their respective companies' current business and strategic objectives".

The two vehicle makers have also agreed to terminate certain associated licensing and other commercial arrangements, including talks regarding a comprehensive commercial vehicle joint venture in Korea.

In future, the two companies' strategic alliance will include:

  • Joint development and manufacture of a family of four cylinder petrol engines between DaimlerChrysler, Hyundai Motor and Mitsubishi Motors Corporation (known as the "World Engine Project")
  • Distribution of Hyundai Motor's Atos and Verna (Accent) passenger car models into the Mexican market through DaimlerChrysler's affiliate
  • Joint procurement activities
  • Supply by DaimlerChrysler of medium duty engines (OM 906) to Hyundai Motor for medium buses

It is anticipated that these projects will have substantial benefits for both parties, the statement added.

Explaining the changes, the statement noted that there have been significant changes in the global commercial vehicle and automotive markets since commencement of the strategic alliance in September 2000, and this has led to a change of priorities at each company.

"To better address these conditions, the companies determined it was mutually beneficial to realign the alliance in order to reflect more realistically current market conditions. The companies expect that these measures will better position the strategic alliance to deliver value and to pursue additional projects going forward," DaimlerChrysler and Hyundai Motor said.

Hyundai Motor vice chairman Kim, Dong Jin said: "We have been partners with DaimlerChrysler for nearly four years now and believe that the realignment of the strategic alliance is an important step forward to better position both companies to capitalise on opportunities in the changed market environment now facing us."

DaimlerChrysler board member and commercial vehicles division head Eckhard Cordes said: "Over the last few years, we created multiple strategic options for sustainable and profitable growth of our business in Asia. We are now implementing the strategy with good progress. In light of these developments, DaimlerChrysler and Hyundai Motor have agreed to primarily focus on a collaborative relationship on a per-project basis in the future."