From Associated Press, MEMA Industry News

DETROIT — General Motors Corp. and DaimlerChrysler AG are teaming up to develop fuel-saving hybrid engines in hopes of cashing in on an expanding market already dominated by hybrid leaders Toyota Motor Corp. and Honda Motor Co.

Financial terms of the agreement between GM, the world’s largest automaker, and its German-American rival weren’t disclosed Monday, but Tom Stephens, GM’s group vice president for powertrains, said the collaboration likely will involve an investment of hundreds of millions of dollars.

The first of the vehicles is to debut in 2007, when Toyota has said it hopes its hybrid model sales total several hundred thousand worldwide.

“This says that both recognize what Toyota is doing,” Mike Flynn, director of the University of Michigan’s Office for the Study of Automotive Transportation in Ann Arbor, Mich., told Bloomberg in an interview. “You need to have some interim, environmentally friendlier technology.”

Although hybrids make up only a minute percentage of global auto sales, Stephens noted some analysts believe hybrids eventually could account for 5 percent to 15 percent of global volume.

GM, which has worked with DaimlerChrysler on transmissions, has also said it considers hybrids a bridge to longer-range hydrogen fuel cell vehicles, which require no fossil fuel and release no toxic emissions.

Hybrids draw power from two energy sources: typically a gas or diesel engine combined with an electric motor. Demand has grown worldwide because of concerns about the dangers of global warming, decreasing natural fuel supplies and the rising cost of those fuels.

GM and Chrysler already sell hybrid pickups, but the systems are less advanced and fuel-efficient than those used on cars sold by Toyota and Honda and on Ford Motor Co.’s hybrid version of its Escape sport-utility vehicle, the world’s first gas-electric hybrid SUV.

GM and DaimlerChrysler said the project will be open to other partners and might result in GM and DaimlerChrysler licensing hybrid technology to rivals.

The GM and DaimlerChrysler jointly built hybrid system will be used in GM, Chrysler and Mercedes vehicles.

Variants planned include rear- and front-wheel-drive versions for cars, trucks and other vehicles.

Copyright 2004 Associated Press. All Rights Reserved.

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