Daimler to invest Rs. 4,400 Crores in India, looking for partners.

[Team-CCI]

Right on the heels of the Renault-Nissan partnership news comes another promising announcement by one of the largest automakers in the World, Daimler.

The world's largest truck maker Daimler said it will invest Rs 4,400 crore over the next five years to set up a manufacturing plant here. They are looking to build the plant in Chennai. Following its aborted joint venture with the Hero Group, the company is also looking for partners for its Indian venture. The German auto major's Indian subsidiary Daimler Commercial Vehicles India (DCVI) today inaugurated a truck testing facility at Oragadam, near the city.

"The company has planned a total investment of Rs 4,400 crore over the next five years. This is the company's first important step towards its strategy to develop, manufacture and launch trucks for the Indian volume market, beginning mid- 2012," DCVI Managing Director and CEO Marc Llistosella told reporters. The 400-acre plant, which will manufacture light, medium and heavy commercial vehicles, will have an initial capacity of 36,000 units in the first phase and will be scaled up to 72,000 units finally, he added.

When asked if the company would again look for partners, Llistosella said: "We are open for shareholding partners, but it should add value for business sense. We will never jump from partner to partner... We will compete on the combination of our USP and we are open for multiple partnerships." The company is holding negotiations in different areas, including logistics, IT, supply, dealers and financial services as "we need partners", he added.

In 2008, Daimler had planned to set up the plant with the Hero Group through a JV, but it did not materialise as the Indian partner pulled out of the venture last year. "Partnership with Hero Group was with full consciousness and willingness, (but) then we were impacted by the financial crisis. This environment is really the best for Hero Group to invest on their own," Llistosella said.

Giving details of the facility, he said the company has spent about Rs 25 crore in the test track and has allocated Rs 1,200 crore for its R&D centre within the plant. "This R&D centre, to be located in the plant, will be one of the biggest in South-East Asia," he added.

DCVI will produce a range of trucks in between 6 tonnes and 49 tonnes category from the facility with a targeted localisation of components of 85 per cent. "Initially in the first phase, we will manufacture 25 tonnes and 49 tonnes heavy duty trucks, and it will be followed by 9 tonnes and 15 tonnes trucks," he said.

Daimler, which currently sells its Actros range of trucks from its group firm Mercedes-Benz's facility in Pune, had last year planned to introduce lightweight trucks from Mitsubishi Fuso stable in the Indian market by 2010. Recently it exited Tata Motors by selling the residual stake of 5.34 per cent in the Indian firm for about 300 million euros.

Apart from the Chennai plant, which employs 450 engineers at present, Daimler has its CV facilities in Germany, the US, Japan, Brazil and Turkey.