• Bloomberg, Tuesday, January 12, 2010 10:40 AM

Daimler AG plans to use half of its $6.4 billion research-and-development budget this year on developing green technology, and it plans to challenge Bayerische Motoren Werke AG's leadership in models that that reduce carbon-dioxide emissions, Chris Reiter reports.

"We will attack this year, definitely," says Thomas Weber, Daimler's development chief. "There is no reason why we should look to others. They have to look to us; we're setting the benchmark."

Mercedes-Benz is introducing a new transmission that improves efficiency and will help it roll out "start-stop" technology that turns off the engine at traffic lights. Daimler is also adding an electric-powered version of the A-Class compact in 2010. It has already producing a limited number of two electric models: a fuel cell-powered B-Class compact and a battery-driven Smart.

Reiter reported yesterday that Daimler's two-year effort to win over U.S. drivers with the Smart minicar sputtered last year after a promising start in 2008. With just one model -- ForTwo -- the brand's U.S. sales plunged 41% to 14,600 cars.

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