Chrysler Group LLC said Mitsubishi Motors Corp. (MMTOY) and Hyundai Motor Co. (HYMLY) have both dropped out of an engine-manufacturing alliance, severing one of the auto maker's few remaining partnerships.

Mitsubishi and Hyundai sold their interests in the Global Engine Manufacturing Alliance plant back to Chrysler effective Aug. 31. The GEMA plant will continue to build engines for Chrysler's product lines. Financial details weren't disclosed.

Chrysler, which merged most of its assets with Italian auto maker Fiat SpA (FIATY) in June, has cut almost all former manufacturing partnerships Chrysler executives had brokered to keep the company competitive.

Last month, Chrysler and Nissan Motor Co. (NSANY) ended their vehicle-development partnerships, citing "significant changes in business conditions." The move killed Chrysler's plans to sell a new small car - developed by Nissan - in North America and Europe by 2010.

All three auto makers were planning to use the GEMA plant, located in Dundee, Mich., to quickly develop more advanced and fuel-efficient engines for use in their vehicles. Production at the plant started in October 2005 although the plant never reached full capacity.

Chrysler spokesman Max Gates said the plant will continue to provide four-cylinder engines to the auto maker.

The decision not to close the plant opens the possibility that Fiat could use the extra space to develop engines in North America.

Fiat, as part of its acquisition of Chrysler, promised to share and develop new technologies with the auto maker for future product development. Fiat also wants to bring some of its product to the U.S.

Fiat has yet to provide details on its future plans for Chrysler.

-By Jeff Bennett, Dow Jones Newswires; jeff.bennett@dowjones.com; 248-204-5542