Hyundai junks Chrysler takeover rumor

Last week DaimlerChrysler AG Chairman Dieter Zetsche hinted the possibility of a sale saying that all options are on the table for the Auburn Hills-based group. According to reports, in the past few months, long before Zetsche made these comments, a number of interested bidders had already started investigating Chrysler's finances.

Reports of General Motors being in talks with DaimlerChrysler for getting hold of all or part of Chrysler had been pouring. It is said that GM is particularly interested in its Jeep and Dodge brands.

Now the Sunday Times of London is reporting that Hyundai Motor Co., the world's sixth-largest automaker, is interested in acquiring the U.S. unit of German automaker DaimlerChrysler AG.

Without citing precise sources, The Times reported on its Web site that Hyundai was thought to be concerned about joining potential bidders for the U.S. automaker. The car manufacturer is also said to be interested in securing access to Chrysler's money-spinning dealer network.

"It's a much more appropriate fit for Hyundai than GM," said Erich Merkle, an auto analyst with IRN Inc. in Grand Rapids. "It would allow them to grow very quickly."

However, the South Korean automaker has rubbished the reports. "We are not considering to buy Chrysler because our hands are full," Hyundai spokesman Jake Jang said. Another spokesman, Oles Gadacz called the report a “groundless speculation.”

In recent years, Hyundai has significantly enhanced its name for quality. Currently it has an engine alliance with Chrysler and Japan's Mitsubishi Motors Corp. under which those companies are allowed to manufacture engines based on Hyundai design.

U.S. investment bank JP Morgan, which has allegedly been advising on Chrysler's prospect, is now getting memorandums ready, to send to all possible buyers this week, said The Times on its Web site.