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Home arrow Alliances and Joint Ventures arrow Daimler Hero Motor Corporation to invest Rs 4,400 cr in CV Joint Venture
Daimler Hero Motor Corporation to invest Rs 4,400 cr in CV Joint Venture Print E-mail
Written by Vijay   
Tuesday, 22 April 2008
Formal Closing of the 'Daimler Hero Motor Corporation' Joint Venture

NEW DELHI, India, April 21: The Indian Hero Group and Daimler AG (DAI) signed a contract today in Delhi that governs the establishment of the Daimler Hero Motor Corporation Ltd. commercial vehicle joint venture. Approval for the new company was issued by the Indian government in March 2008, and the two partners now plan to proceed rapidly with the implementation of the joint venture.

The Daimler Hero Motor Corporation will initially produce light, medium, and heavy-duty commercial vehicles for the Indian volume market under a new brand name. The search for a suitable production location is currently under way. Negotiations are being conducted with three Indian states. The talks are expected to conclude shortly.

Start of production planned for 2010

Once a decision is made, construction will begin on a plant that will start manufacturing commercial vehicles in 2010. The new company is aiming to achieve a localization rate of up to 80% in order to optimally utilize cost advantages. Production of commercial vehicles for export to other emerging markets will be launched at a later date.

Total investment of over euro 700 million until 2013

The total investment of the German-Indian joint venture will be over euro 700 million over the next five years. The equity of Daimler and the Hero Group into the new company will be in sum euro 360 million; thereof Daimler will contribute euro 220 million in the form of foreign direct investment.

Daimler Manager Marc Llistosella appointed CEO of the new joint venture

Marc Llistosella, who directed the joint venture project from the Daimler side, will become CEO of the Daimler Hero Motor Corporation. Amit Chaturvedi, currently President, Strategy and Business Development, at Hero Corporate Service Ltd. and project leader from the Hero Group, will serve as Co-CEO. Mr. Sunil Kant Munjal will be the Chairman of the new company's Board of Directors. The company will be managed jointly by the two partners.

"Today is a further important milestone for Daimler Trucks and our Asia strategy," said Andreas Renschler, member of the Daimler AG Board of Management and Head of Daimler Trucks. "In the Hero Group we have found an ideal partner, as the two companies perfectly complement one another in terms of the experience and expertise they contribute to the joint venture. The fact that the negotiations and the approval process ran so smoothly makes me very confident that the establishment of the new company will proceed just as rapidly and successfully."

"Hero has a proven track record of managing long-term relationships with business partners. The Daimler Hero Motor Corporation has been conceived as a long term business by both sides, were we'll be able to contribute our complementary competences and to learn from each other", Mr. Sunil Kant Munjal, Chairman of Hero Corporate Service, said. "This joint venture has been planned against a backdrop where large parts of India are increasingly getting connected through trade and commerce, so the growth upside in the long term is strong.''

About Daimler Trucks

Daimler Trucks is a division of Daimler AG and the world's leading truck manufacturer. Its five leading truck brands - Mercedes-Benz, Freightliner, Sterling, Western Star, and Mitsubishi Fuso - generated revenues of €28.466 billion in 2007 on sales of more than 467,667 units worldwide.

About the Hero Group

The Hero Group, which was founded more than 50 years ago by the Munjal family, is now a major conglomerate with numerous divisions and products that generate annual revenues of over $4 billion. The company has an excellent network and comprehensive knowledge of the Indian market. Hero Honda Motors Ltd. - a joint venture between the Hero Group and Honda - is the world's leading motorcycle manufacturer and has built more than 20 million motorcycles for the Indian market to date.

 
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