Daimler inks JV pact with Munjals

Daimler Trucks, the commercial vehicles (CVs) subsidiary of German automobile giant Daimler, today announced its joint venture agreement with the Munjal-promoted Hero Group to produce its full range of commercial vehicles.

Both the companies signed a shareholder agreement and are in the process of submitting the application to the Foreign Investment Promotion Board (FIPB) for approval.

The unnamed joint venture will make light-, medium- and heavy-duty trucks, initially targeted at the local market. The JV aims to export volumes at later stages. The vehicles produced will be variants of Daimler Trucks' current product portfolio in India.

However, Daimlers' local outfit, DaimlerChrysler India, will continue to produce the Actros range of high-end trucks at its Pune facility, according to a company release.

Andreas Renschler, member of the Daimler management board and head of Daimler Trucks, said, "The decision to form the joint venture in India marks a milestone in Daimler Trucks' overall strategy to participate in fast-growing emerging markets. Hero has a proven track record of managing long-term relationships with global and domestic partners. We believe this is a strong foundation for a long-term cooperation in one of the world's most dynamic markets."

Sunil Kant Munjal, chairman, Hero Corporate Service, a Hero Group arm, said, "The partnership with Daimler Trucks is in pursuance of the Hero Group's long-term vision and strategy to have a diversified portfolio of high-growth businesses. We can benefit from Daimler Trucks' world-class products and technology and combine those with our own strengths to create winning products for Indian and other global customers."

The announcement comes at a time when growth projections for the domestic commercial vehicles market are looking healthy, mainly due to improving infrastructure and new emission and safety regulations. The sector's average growth in the last three years has been 20 per cent.

Daimler Trucks is the world's largest manufacturer of commercial vehicles. With its five leading truck brands "" Mercedes-Benz, Freightliner, Sterling, Western Star and Mitsubishi Fuso "" Daimler Trucks sold over 516,000 trucks worldwide and generated revenues of ¤ 31.8 billion last year.

The $4 billion Hero Group's flagship company, Hero Honda Motors, is the world's largest motorcycle producer. The company also makes bicycles.