But, according to sources, both these activities attract Press Note 1 since Daimler continues to hold a little over 6% stake in India’s largest truck and bus maker Tata Motors.
Since it has a stake in Tata Motors, the company will have to get a clearance from Tatas
NEW DELHI: Has Daimler hit the ‘Press Note 1’ barrier while planning its Indian expansion?
The German auto major wants to begin a bus body building plant under a joint venture with Sutlej Motors and has announced a JV with the Munjals of the Hero Group for bringing its truck range to India.
But, according to sources, both these activities attract Press Note 1 (2005 series) since Daimler continues to hold a little over 6% stake in India’s largest truck and bus maker Tata Motors.
This means Daimler needs a no-objection certificate from the Tatas before it can go ahead with either bus-body building or truck-making in India under new JV companies. Daimler is already trying to work around this little problem through diplomatic channels - the German government is believed to have written to the ministries of external affairs as well as heavy industries, seeking a waiver of the NoC condition.
But it is still not clear whether Daimler has decided to sell off its equity in Tata Motors or if it is trying to get the government to waive the NoC requirement under Press Note 1.
Despite several attempts, the Daimler Chrysler India spokesperson could not be reached for comments even as a Tata Motors spokesperson declined to comment.
According to Daimler’s proposal, which has already been cleared by the Foreign Investment Promotion Board with the Press Note 1 rider, it plans to produce luxury coaches in Pune under the JV with Sutlej Motors and production is slated to begin in the first quarter of next year.
At present, Daimler has manufacturing operations for special applications of Mercedes-Benz trucks and buses, besides making the Actros truck range here. But these would not be affected by the NoC requirements.
Sources said, in the proposed JV with the Hero Group, Daimler is looking to buy a majority stake. The two partners, it is believed, are yet to finalise the key details of the JV.
The partners have already signed a shareholder agreement and are in the process of submitting application to the FIPB. The JV would first focus on local production of light, medium and heavy-duty commercial vehicles for the Indian volume market.
Production for the export market is expected to follow at a later stage. The vehicles produced will be variants of Daimler Trucks’ current product portfolio tailored to the Indian market.
Daimler Trucks is the world’s largest manufacturer of commercial vehicles, with five leading truck brands — Mercedes-Benz, Freightliner, Sterling, Western Star and Mitsubishi Fuso.
b_sindhu@dnaindia.net
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