DaimlerChrysler has sold its 10.5-per-cent stake in South Korea's Hyundai, but spokesman Toni Melfi said existing co-operation between the two companies would continue, including a joint purchasing project and plans to build a new four-cylinder engine together with Mitsubishi. DaimlerChrysler will also go on supplying Hyundai with its OM906 six-cylinder engines for use in medium buses.

"All the projects will go on," Melfi said.

The two car makers' relationship cooled amid the German automaker's plans to build Mercedes-Benz cars in China in partnership with Beijing Automotive Industry Holding Co. Hyundai said that violated its own agreement with Beijing Automotive, which Hyundai said had agreed not to enter into other joint ventures until its deal with Hyundai expired.

DaimlerChrysler bought the stake as part of CEO Juergen Schrempp's effort to build a global auto powerhouse with a presence in all major markets. But the company's strategy in Asia began to come undone with losses at Mitsubishi Motors, where DaimlerChrysler had a 37-per-cent stake. That holding has been diluted to less than 25 per cent after DaimlerChrysler cut off further investment and Mitsubishi carried out a capital increase.