The world’s largest truck manufacturer Daimler AG and the Munjals-owned Hero group on Monday said they will invest Rs 4,400 crore in the next five years through a joint venture to develop and manufacture commercial vehicles in the country by 2010.
The two companies on Monday signed a joint venture agreement in which the German partner will have 60% stake and the rest will be with the Hero group in a company named Daimler Hero Motor Corporation (DHMC).
As a part of the agreement, Daimler will invest Rs 1,368 crore while the Hero group will put in Rs 900 crore.
“This joint venture will first focus on light and medium commercial vehicles which will be developed with specific Indian conditions in mind to be launched by 2010. By 2012 it will roll out heavy commercial vehicles,” Daimler Trucks head Andreas Renschler said. Currently, the partners are scouting for a location to set up a greenfield plant. “We have identified three locations — Haryana, Chennai and Pune. In another four to six weeks time we expect to finalise the location,” Hero Corporate Services chairman Sunil Kant Munjal said.
The plant will have an initial production capacity of 70,000 units and will be scalable in future, he added. The joint venture aims to have a localisation level of 80% when it starts entering the Indian commercial vehicles market by 2010.
Renschler said although Daimler already has a commercial vehicles operation in India in the form of Mercedes Benz India, which imports the Actros range of off-road mining trucks, the JV with Hero will be responsible for products that are specifically developed for the Indian market and exports to other emerging markets.”Any import of existing products to India from Daimler’s portfolio will go to Mercedes Benz India and the JV will develop new products for the Indian market,” he added.
He said as Daimler already has a research and development centre in Bangalore, the JV should be able to leverage from it.
Renschler also said that Daimler had no plans to exit from Tata Motors, where it has 6.6% stake although it will “see” on how to go about the 3.6% stake in Eicher Motors.
