"In general when I look at the whole region, there is a setback of up to 40 per cent due to the crisis," Ludwig-Holger Pfahls told Reuters.

He did not disclose the 1997 auto sales for the region covering Singapore, Malaysia, Indonesia, Brunei, the Philippines and Taiwan.

"There is no doubt that we have some setbacks in some markets. You must see every market differently," Pfahls said.

Daimler-Benz, the maker of the luxurious Mercedes Benz, saw an 85-per cent sales setback in crisis-stricken Indonesia.

It lost some two to three per cent of its 11 per cent pre-crisis Singapore pie to Japanese competitors.

"The winners are the Japanese due to the weak yen compared with the very strong Deutschemark and the strong US dollar."

In contrast, Daimler-Benz's stronghold inTaiwan enjoyed a one per cent improvement in market share compared to 31 per cent in 1997.

On his expectations for the region's recovery, Pfahls said:

"For the time-frame of two to three years, I expect Singapore, Taiwan, Brunei and the Philippines to be back to the old numbers," he said.

"Malaysia is the same as Indonesia. As long as the political uncertainties are not settled, every investor will be a little shy about putting more money in these countries," he said.

Pfahls was optimistic Singapore would recover by the end of 1999 due to the government's efforts to tackle the crisis and the group's plan to launch the new version of the S-Class Mercedes Benz.

A pre-launch has been scheduled for next month.

"We will not lose more market share in Singapore," he said.

"I tell you the S-Class is such an extraordinary car that it will have very positive impact on our sales numbers."

All Pfahls would reveal about the S-Class Mercedes Benz new model was that it has three innovative features includingan automatic distance control function.

Pfahls said Daimler-Benz, which has completed its merger with US automaker Chrysler on November 12, would now be able to achieve its Asia target from eight per cent of the group's turnover to 25 per cent over the next 10 years.

"Chrysler has given us a great opportunity to switch over to second makes or marques because they are not in the upper luxury segment like Mercedes Benz," Pfahls said.