Daimler AG, the world’s largest truck maker, plans to expand its presence in the Indian commercial vehicle market and is expected to announce a local partner.
NEW DELHI: Daimler AG, the world’s largest truck maker, plans to expand its presence in the Indian commercial vehicle market and is expected to announce a local partner before the year-end.
Daimler is believed to have zeroed in on the Hero Group for launching heavy trucks here and sources say that the two partners have already tested some products at a manufacturing facility on the outskirts of Delhi.
It seems Daimler, which already assembles the Actros brand of premium trucks in India, is looking at a more mass-market range in its partnership with the Hero Group.
The company’s second manufacturing plant, coming up at Chakan (Pune), would be operational only by 2009, so that it may be examining contract manufacturing options for the new truck range for the short term.
According to sources, Wilfred Aulber, the CEO of DaimlerChrysler India, is in Germany for a board meeting of Daimler and a decision on the Indian truck venture may well be taken within the next few days.
A spokesperson at the Daimler headquarters said in an e-mail response, “Daimler Trucks is currently present in India with local manufacturing operations of the Mercedes-Benz Actros in Pune. These are and will always be niche products in terms of high-tech and quality. For the volume market, we plan a partnership and local production in India. The partner is chosen, negotiations are on-going. We will announce the name still in 2007.”
The spokesperson declined to elaborate on the kind of equity participation Daimler wants from the Indian partner.
An e-mail to Hero Motors MD Pankaj Munjal remained unanswered, while a Hero Group spokesperson declined to comment.
According to the Daimler website, its trucks division comprises six independent brands.
While Mercedes-Benz trucks run across Europe and Latin America, the Mitsubishi Fuso brand is used in Asian markets.
Sources said that Daimler has been in talks with Eicher Group for a similar tie-up, but the talks fell through in valuation issues. Interestingly, Daimler continues to hold a small equity stake in India’s largest truck maker, Tata Motors.
Meanwhile, the two prospective partners could be looking at an equal partnership.
While Daimler would get local expertise through the joint venture route, the Hero Group is looking for technology and a well-known brand name.
Hero is already a market leader in the two-wheeler segment through Hero Honda and has acknowledged its interest in developing a commercial vehicle in the past.
With arch-rival Bajaj Auto also looking to get into the four-wheeler space, Hero’s CV push could not have come at a better time.
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