PRESS RELEASE:

BMW and DaimlerChrysler to cooperate on development of a hybrid drive system for premium segment cars

Munich/Stuttgart, Mar 01, 2007

The BMW Group and DaimlerChrysler AG are expanding their collaboration in the field of hybrid drive systems and will participate as equal partners in the development of an innovative hybrid module for rear-wheel-drive premium segment cars. Both carmakers plan to commercialise the new module within the next three years. This collaboration will allow the two companies to share their extensive know-how and to achieve increased efficiency through economies of scale.

The decision to jointly develop hybrid drive components will allow DaimlerChrysler and BMW to extend their range of innovative drive systems for rear-wheel-drive premium segment cars. Both manufacturers will benefit from the pooling of development capacity, which will make for faster commercialisation, and from improved cost efficiencies due to higher unit volumes. The components will be individually adapted by the two companies to the different character of the two brands.

As Dr Thomas Weber, Member of the Board of Management of DaimlerChrysler responsible for Group Research and Mercedes Car Group Development, emphasises: "Cooperation in the field of innovative drive systems makes good sense not only from a technical but also from an economic standpoint. It will help to strengthen the competitiveness of two German manufacturers whose requirements in the premium segment are very similar. This is a segment where rapid commercialisation of drive technologies offering high efficiency, performance and comfort is particularly important."

According to Dr Klaus Draeger, Member of the Board of Management of BMW AG responsible for Development and Purchasing: "This collaboration will allow us to broaden our technological base in the area of future hybrid drive systems for the premium class and will allow the two companies to pool their innovative resources. The distinct identities of the different brands will not be affected, since the relevant technologies will be tailored to fit the specific character of the different vehicles."

Both technically and geographically, the core development work on the proposed hybrid module, which will be of the mild hybrid type, will take place in Germany, at the relevant engine and drivetrain development sites. A common project framework will ensure close integration of the development teams and will harness the combined knowledge base of both manufacturers. Synchronised development procedures, joint testing and state-of-the-art quality assurance and development methods will assist the efficient implementation of the project.

This new collaboration between BMW and DaimlerChrysler extends the existing cooperation at the Hybrid Development Center in Troy, USA, which began in 2005. Both companies are rapidly expanding their portfolio of alternative drive technologies and rounding out their range of hybrid drive components.