The Hindu Business Line : Daimler gets nod for venture with Hero; to invest Rs 1,650 cr

The Cabinet Committee on Economic Affairs today approved Daimler’s technology and licensing agreement with the Hero Group that will see infusion of 60 per cent equity capital towards designing, manufacturing and selling of commercial vehicles.

The Cabinet note also said that the joint venture would undertake research and development activity for new products and its variants. The Hero-Daimler joint venture, which would produce commercial vehicles above 2 tonne, would sell initially in the domestic market and later in overseas markets.

Further, to leverage India’s cost advantage for its overseas operations, Daimler would also source components from the domestic market to meet its global requirements.

Daimler Trucks is a division of Daimler AG and has five major truck brands – Mercedes-Benz, Freightliner, Sterling, Western Star and Mitsubishi Fuso. At present, Daimler has a subsidiary, Mercedes Benz India Pvt Ltd that manufactures buses and trucks. While announcing the signing of the deal, in a joint statement released in December last year, the company had said that the local manufacturing operations for special applications of Mercedes-Benz trucks and bus bodies would continue for the time being at its Indian subsidiary that currently manufactures Mercedes-Benz Actros trucks in Pune.

The statement also said that the vehicles they seek to produce will be variants of Daimler Trucks’ current product portfolio tailored for the Indian market. Through the joint venture with the Hero Group, the German truck maker plans to beef up its sales in emerging markets like India and also sell its products worldwide at a competitive price.

For the Hero Group controlled by the Munjals, the joint venture would offer them access to technology and markets.

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