Daimler Hero to roll out vehicles in Tamil Nadu

July 7th, 2008 - 7:33 pm ICT by IANS  

Chennai, July 7 (IANS) Daimler Hero Motor Corp, a joint venture floated by German auto major Daimler AG and Indian two-wheeler giant Hero group, Monday signed an agreement with the state government to manufacture commercial vehicles in Tamil Nadu. The joint venture will set up the manufacturing facility at the Sipcot industrial estate near Chennai to roll out 70,000 light, medium and heavy vehicles annually, a government statement said.

The total investment in the plant, spread over five years, is expected to be Rs.35 billion ($80.86 million), though it could go up to Rs.40 billion depending on requirement. At peak capacity, the plant will employ 3,000 people.

Daimler has a research and development centre in Bangalore, from which inputs would be used for designing and developing the commercial vehicles, to be sold under a new brand name.

The initial focus would be the Indian market, though later exports would be made to developing markets, officials said.

This would be the largest investment made by a German company in Tamil Nadu. According to Daimler officials, Chennai’s infrastructure and proximity to suppliers went in its favour.

Of late, the state has attracted a series of investments in the auto sector, both for new projects, as well as expansion of existing units.

Domestic manufacturer Ashok Leyland has tied up with Japan’s Nissan to manufacture commercial vehicles at an investment of Rs.23 billion.

Nissan has also tied up with French major Renault to set up a Rs.35 billion plant for manufacturing cars.

American companies Ford and Caterpillar have also announced fresh investments of Rs.20 billion and Rs.8 billion, respectively.

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