DAIMLER and India's Hero Group are to invest more than 700 million euros (US$1.1 billion) in a commercial vehicle joint venture that should start production in India in 2010.
Approval for the Daimler Hero Motor Corp Ltd was granted by India's government last month and a manufacturing site is being sought, the companies said.
The joint venture will produce commercial vehicles for the Indian market but has not ruled out exports to other emerging markets.
"Today is a further important milestone for Daimler Trucks and our Asia strategy," Andreas Renschler, head of Daimler Trucks, said yesterday. "In the Hero Group we have found an ideal partner."
Co-chief executives of the venture will be Marc Llistosella, who directed the project for Daimler, and Amit Chaturvedi, president of strategy and business development at Hero Corporate Service.
Known for its Mercedes-Benz and Smart brands, Daimler is Europe's biggest truck maker with brands including Freightliner, Sterling and Mitsubishi Fuso. Last year, its truck unit posted revenue of 28.5 billion euros with 467,667 trucks sold worldwide.
India's Hero Group was founded more than 50 years ago and has annual sales of US$4 billion. Hero Honda Motors, a joint venture with Japan's Honda, has built more than 20 million motorcycles for the Indian market.
Daimler shares were down 0.55 percent in Frankfurt, trading at 50.38 euros.