In what could possibly be the largest foreign direct investment (FDI) from Germany into Tamil Nadu, Stuttgart-based Daimler, the world’s largest truck manufacturer, and India’s Hero group signed a memorandum of understanding (MoU) on Monday with the state government to establish a 700 million euro commercial vehicle manufacturing facility near Chennai.
The manufacturing project, which will come up on 400 acres at Orgadam, is a part of the commercial vehicle joint venture (JV), Daimler Hero Commercial Vehicles (DHCVL), between the two companies that was announced a few weeks ago.
Andreas Renschler, member of the board of management, Daimler, said the company saw a lot of opportunities in the Indian commercial vehicle market and the new manufacturing facility would develop a range of products for the country’s domestic needs.
The 60:40 Indo-German JV DHCVL will have an equity component of 360 million euros. Daimler will contribute 220 million euros as FDI in India and the rest will come from the Hero group.
However, the two companies will initially invest Rs 3,000 crore, inclu-ding debt, in the Chennai plant.