DaimlerChrysler, the German-US car manufacturing giant, is considering assembly of its next generation 4-seater Smart cars at the Nedcar plant in the Netherlands.

The carmaker is anticipated to take a 50 % stake in the Nedcar plant -which currently produces models for the Ford subsidiary Volvo, alongside Mitsubishi Motors of Japan - in 2004, once the current partnership between Volvo and Mitsubishi expires.

Interest in Nedcar has increased following DaimlerChrysler`s proposed acquisition of 34% of Mitsubishi, set to be completed before the end of this month, paving the way for three DaimlerChrysler executives to join the Mitsubishi Board.

Ford`s decision to build the next generation of medium-sized Volvo cars - the successors to the current S40/V40 range - at Volvo`s Ghent site in Belgium and not at Nedcar will create surplus capacity at the Dutch plant, according to Senior DaimlerChrysler Executives.

Increased capacity for Smart car manufacture, using Mitsubishi components and common vehicle architecture, is much needed for DaimlerChrysler as its current Smart car site in Hambuch, on the Franco-German border, is expected to reach full capacity by 2004.

Achieving its optimum capacity has been due to increased sales, including both the diesel and soft-top versions of the car which is expected to exceed 100,000 this year - a 20,000 increase from 1999. Demand is set to increase beyond the 200,000-unit capacity levels Hambuch currently achieves when DaimlerChrysler launches the right-hand drive version - in both UK and Japanese markets - in 2001, as well as the roadster model of the popular two seater.