Bloomberg

Daimler Hero is hoping to manufacture 70,000 commercial vehicles per year

The world’s largest truck maker, Daimler AG of Germany and India’s Hero Group have entered into a joint venture (JV) agreement to tap the fast growing commercial vehicle market in India.
The two firms would jointly invest Rs 4,400 crore in the venture over the next five years.
The JV company — Daimler Hero Motor Corp. — would roll out light, medium and heavy commercial vehicles under a new brand for the Indian and overseas markets and would set up a greenfield manufacturing facility here, which is expected to be operational by 2010. Daimler Hero would design, manufacture and sell commercial vehicles of two tonnes and above for the Indian as well as the overseas market, branding for which is yet to be decided. Daimler trucks head and member, board of management, Daimler AG Andreas Renschler said Daimler Hero would roll out exclusive products for the Indian market and existing Daimler platforms such as Freightliner, Sterling, Western Star and Mitshubishi Fuso would not be brought in the country as a part of the JV. Daimler, which will invest Rs 1,386 crore in the venture, already assembles Mercedes-Benz Actros trucks at its Chakkan plant, near Pune.
The German firm will continue to market Actros trucks in India after the JV.
Daimler Hero’s first focus would be on medium and light commercial vehicles, while it will roll out heavy commercial vehicles after 2012. The company will also source components from India for Daimler’s global requirements, in addition to undertaking research and development activity for new products and variants.
Daimler will hold a majority 60 per cent stake in the venture, while the remaining 40 per cent would be held by Hero Group.Daimler Hero would kick start operations with an initial capacity of 70,000 vehicles a year, which would be scaled up in the near term.
According to Society of Indian Automobile Manufacturer's Association (SIAM) figures, domestic commercial vehicle sales in India grew 4.07 per cent during FY2008 to 4,86,817 units. Exports grew a healthy 19.1 per cent to 58,999 units during the year.