Business Daily from THE HINDU group of publications
Wednesday, Mar 10, 2010
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Business Daily from THE HINDU group of publications Wednesday, Mar 10, 2010 ePaper | Mobile/PDA Version | Audio | Blogs |
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HCV/LCV/Tractors Markets - Stocks Corporate - Alliances & Joint Ventures
‘Daimler is today in an excellent position to capitalise on the growth potential in India and continues to intensify its own activities there.' Vidya Ram London, March 9 Daimler, the German maker has finally confirmed it had sold all of its 5.34 per cent ordinary shares of Tata Motors to various investors, bringing it in a tidy cash inflow of €300 million. The German firm has established itself firmly in the Indian market, making the need for Tata as a partner effectively redundant. Daimler said that in the first two months of 2010 sales of Mercedes Benz in India nearly doubled and that it intended to grow at a double digit rate for the year as a whole. Daimler's truck division – Daimler India Commercial Vehicles Ltd - is also building a plant in Chennai which is expected to begin production in 2012. “Daimler is today in an excellent position to capitalise on the growth potential of the Indian passenger and commercial vehicle markets and continues to intensify its own activities there,” said the company in a statement, adding that as a result having an equity stake in Tata was “no longer necessary.” “Relations between the two companies are excellent and will not be adversely affected by the sale.” Some believe that Daimler's involvement in Tata had failed to deliver the opportunities they had hoped for when they first took on the stake. “Over the years they had the stake, they haven't really made any progress regarding any of the projects; so from Daimler's perspective it was essentially dead capital,” said a Munich based analyst. Last month, Daimler surprised the market with a €2.6 billon net loss for 2009, and scrapped its dividend, sending its shares plummeting. However, others see it in a much more positive light. “Pulling out of Tata in our opinion is a very good sign for Daimler, signalling that it is planning to move more aggressively in India than they would together with Tata,” says Mr Christoph Stuermer, a director in the automotive group of IHS Global Insight in Frankfurt. “They are putting a lot of money into India and therefore getting some revenue out of India to finance investment due there is also a very good idea.” He added that Daimler was also beginning to see Tata - with signs of a recovery at Jaguar Land Rover, and the appointment of Carl Peter Foster - as more of a competitor. “Why keep money in a competitor when they don't even have technical cooperation any more?” Daimler to shed stake in Tata Motors Daimler re-enters commercial vehicle space; no truck with Tatas More Stories on : HCV/LCV/Tractors | Stocks | Alliances & Joint Ventures | Tata Motors Ltd
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