Stuttgart, Germany  - Dieter Zetsche, chief executive of the maker of Mercedes-Benz cars, said Thursday he aimed to link up with Toyota of Japan to develop fuel-cell engines, but there had been no talks yet.

His company, Daimler, has been hit hard by a world slump in sales of its premium cars. Toyota is the world's most powerful car company.

"It's definitely possible that we could cooperate with Toyota in particular areas if it benefits both companies," he told a German cars magazine, Auto, Motor und Sport. "But we are not in any concrete negotiations."

Zetsche also said Daimler was considering linking up with another manufacturer to make the next generation of its Smart micro-car, but did not respond when asked if that partner might be Renault.

He told the magazine that Daimler's cooperation with its German rival BMW in purchasing was closer than had been publicly disclosed.

"However we also have to maintain a balance between the dangers to our strong brands and the benefits in terms of costs," he said.

Earlier Wednesday, a German daily, the Sueddeutsche Zeitung, quoted him saying one option on the two firms' agenda was to build a joint gearbox factory somewhere in North America.

He added that he hoped that Abu Dhabi, a principal investor in Daimler through its sovereign wealth fund, was also voicing interest in the German company providing engines to be used in the planned city of Masdar.

Abu Dhabi is to build the city as a centre of low-emissions, renewable energy. Zetsche said lightweight vehicle bodies and alternative engines could be put into use there. dpa