Driveline and chassis specialist ZF Friedrichshafen is now in competition with its hybrid partner BMW as a result of the automaker’s decision to join the General Motors-DaimlerChrysler hybrid alliance, an Automotive News Europe report said.

The German supplier has worked with BMW for several years to develop a hybrid transmission module for luxury vehicles, but BMW’s September announcement means that a different BMW hybrid likely will be the first to market.

ZF announced last month its own strategic cooperation. It will work with Germany’s Continental to produce hybrid drivelines. The partnership could rival the GM-DaimlerChrysler-BMW consortium in offering ready-made hybrid technology to the world’s automakers.

ZF officials are surprised and disappointed at BMW’s move into the GM-DC alliance. “We have worked with BMW for many years,” said an executive who did not wish to be named. “BMW has now decided to do its first step in cooperation with GM – so now we want to do a hybrid system in competition with the GM system.”

BMW said it was following two lines of development for hybrids. The one that involves ZF is the hybrid system shown on the X3 SUV at last’s month IAA in Frankfurt. The other is a two-mode hybrid developed by the GM alliance.

Of these, the GM system likely will be first to market, BMW technology spokesman Daniel Kammerer said. Nevertheless, Kammerer conceded that the hybrid made with ZF would be “more BMW type” in character.

A BMW series-production hybrid car could debut in three to five years, Kammerer said.

ZF executives interviewed at the Frankfurt motor show said the two-mode hybrid system under development by the GM-DC alliance is less efficient and less well suited to European conditions than ZF’s system.

ZF and Continental say that by forming their alliance they will be able to start production of hybrid systems from 2007. The consortium is already working with “most European OEMs that are not part of the GM-DaimlerChrysler alliance,” a ZF source said.

Separately, the source said that in 2006 a “non-European” automaker will introduce a compact car with a hybrid variant of ZF’s continuously variable transmission.