Hyundai Motor reportedly has rejected a proposal by DaimlerChrysler to jointly build an engine plant in China, contradicting a Korean newspaper report.

"Hyundai was approached by DaimlerChrysler 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 told Reuters.

The comments to the news agency followed a South Korean newspaper report earlier on Wednesday that cited DaimlerChrysler's chief executive as saying the car maker is talking with Hyundai about building a joint venture engine plant in China.

DaimlerChrysler chief executive Dieter Zetsche reportedly said in an interview with the Chosun Ilbo newspaper at the Detroit motor show that the firm is also willing to cooperate with South Korean component makers in China.

According to Reuters, Chosun Ilbo said DaimlerChrysler's joint engine plant plan with Hyundai was seen as part of DC's efforts to cut costs.

The news agency noted that Hyundai is currently supplying engines to Chrysler, which is readying a cost-cutting plan to be announced in February after it had set a goal earlier this year of cutting $US1,000 from the cost of each car it produces.