[LOGO]

                                                                   July 31, 2000

To Detroit Diesel Stockholders:

    On July 20, 2000, DaimlerChrysler North America Holding Corporation, a
Delaware corporation ("DCNA"), a wholly owned subsidiary of DaimlerChrysler AG
("DaimlerChrysler AG") and the holder of approximately 21.4% of the outstanding
common stock of Detroit Diesel Corporation ("Detroit Diesel"), Diesel Project
Development, Inc., a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of DCNA, and Detroit Diesel entered into a merger agreement providing
for the acquisition of all of the outstanding Common Stock of Detroit Diesel at
$23.00 per share, net to the seller in cash.

    The Purchaser has today commenced a cash tender offer for all outstanding
shares of Common Stock at a price of $23.00 per share in cash. DDC
Holdings, Inc., a subsidiary of Penske Corporation ("Penske") and a 48.6%
shareholder of Detroit Diesel, has agreed to sell its shares to the Purchaser
and to tender them pursuant to the offer. The merger agreement provides that,
following the tender offer, the Purchaser will merge with and into Detroit
Diesel and any remaining shares of common stock of Detroit Diesel, other than
those owned by DCNA, the Purchaser, the Company and any of their subsidiaries
will be converted into the right to receive the same price paid in the offer.

    At a meeting held on July 19, 2000, the Detroit Diesel Board of Directors,
based on, among other things, the unanimous recommendation of its Special
Committee of directors of the Board that are not affiliated with the Purchaser
or Penske, by unamimous vote of those present (i) determined that the merger
agreement, the offer and the merger are fair to and in the best interests of
Detroit Diesel's stockholders, (ii) approved the form, terms and conditions of
the merger agreement, and (iii) recommended to Detroit Diesel's stockholders
that they tender their shares in the offer.

    In arriving at its recommendation, the Board of Directors gave careful
consideration to the factors described in the enclosed tender offer materials
and Detroit Diesel's Solicitation/Recommendation Statement on Schedule 14D-9.
Included as Annex I to the Schedule 14D-9 is the written opinion, dated
July 19, 2000, of Morgan Stanley & Co. Incorporated, the Special Committee's
financial advisor, to the effect that, based upon and subject to the assumptions
and limitations described in the opinion, on the date of the opinion the
consideration to be received by the holders of shares of Detroit Diesel Common
Stock pursuant to the merger agreement was fair from a financial point of view
to such holders (other than Penske and DaimlerChrysler AG and their affiliates).

    Enclosed for your consideration are copies of the Offer to Purchase and
related materials provided by the Purchaser, including a Letter of Transmittal
to be used to tender your shares. Also enclosed is Detroit Diesel's
Solicitation/Recommendation Statement on Schedule 14D-9, which is being filed
today with the Securities and Exchange Commission. These documents should be
read carefully and in their entirety.

                                        Sincerely,

                                        /s/ Roger S. Penske

                                        Roger S. Penske
                                        Chairman of the Board