The partnership, which still needs government approval, will initially build trucks for the Indian market, with export production to follow later, Stuttgart, Germany-based Daimler said in a statement on Friday.
Daimler, which didn’t specify an investment amount or location, plans to release details at the end of the first quarter, when it expects to complete the transaction.
“We believe this is a strong foundation for a long-term cooperation in one of the world’s most dynamic markets,” Daimler Commercial Vehicles Chief Andreas Renschler said in the statement.
The company is following competitors Volvo AB, MAN AG and Navistar International Corp. in setting up a truck joint venture in India to capitalize on growing demand for heavy transport vehicles. India has the world’s second-fastest growing major economy after China’s, with gross domestic product expanding by 9.1 per cent in the six months through September.
Similar alliances
Daimler already makes Mercedes-Benz Actros trucks at its own plant in the Indian city of Pune, where the company also assembles Mercedes-Benz E-Class, C-Class and S-Class sedans. Daimler has set up a joint venture with Sutlej Motors Ltd. to build luxury buses beginning in the first quarter. Volvo, world’s second-largest truckmaker, announced on December 10 that it will invest in a joint venture with New Delhi-based Eicher Motors Ltd that will give the Swedish company half ownership of India’s third-largest commercial-vehicle manufacturer. Gothenburg, Sweden-based Volvo will contribute $350 million, including $275 million in cash, to the partnership, which will take over Eicher's truck, bus and components business.
Munich-based MAN, Europe’s third-biggest maker of trucks and buses, has a 30 percent stake in a joint venture with Pune-based Force Motors Ltd. that will have capacity to build 24,000 vehicles a year. Half of the production will be exported.
Navistar, world’s fourth-biggest truckmaker, has an agreement to build a Rs 25 billion ($635 million) plant by 2009 with Mahindra & Mahindra Ltd., India’s biggest maker of off- road vehicles.
