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Daimler Hero Commercial Vehicles
production plant to be located in Chennai
Stuttgart - The Indo-German joint
venture Daimler Hero Commercial Vehicles (DHCV), which was
founded a few weeks ago by Hero Group and Daimler AG, concluded
negotiations concerning its production location this week.
The company decided in favour of
the city of Chennai on the east coast of Southern India, which
is also India's fourth-largest city and the capital of the state
of Tamil Nadu. The Memorandum of Understanding (MoU) was signed
today in Chennai in the presence of M. Karunanidhi, Chief
Minister von Tamil Nadu by M. F. Farooqui, Industry Secretary of
the State of Tamil Nadu, Sunil Kant Munjal, Chairman of Hero
Corporate Service, Andreas Renschler, Member of the Daimler
Board of Management and Head of Daimler Trucks as well as by
DHCV’s CEO Marc Llistosella and Co-CEO, Amit Chaturvedi.
The key factors leading to the
choice of the Chennai site for the future production plant were
proximity to important suppliers, city's infrastructure,
transportation connections and the large number of
well-qualified skilled workers in the region.
The plant site, which measures 1.6
square kilometers (approx 400 acres), is located at Oragadam,
District Kanchipuram, in the direct neighborhood to several
supplier parks where Daimler Hero Commercial Vehicles could also
secure sites for future suppliers.
The Indo-German joint venture will
soon begin the construction of a new factory in Chennai, where
it will produce commercial vehicles under a new brand name for
the Indian volume market and exports. Starting in 2010, the
plant is to produce up to 70,000 trucks in its initial phase of
operation. At a later point, the production of trucks for export
markets whose product requirements are similar to those of the
Indian market is planned.
DHCV is aiming to achieve a
localization rate of up to 80% in order to optimally utilize
cost advantages. The proximity of the Chennai plant to the local
supplier industry will help greatly utilize these cost
advantages and will also help the local industry and community.
Daimler AG and the Hero Group
signed the contract establishing the joint venture in Delhi on
April 21. Total investment in the Indo-German joint venture will
amount to over €700 million over the next five years. The equity
capital brought in by Daimler and the Hero Group will amount to
€360 million. Daimler will contribute €220 million of this
amount as a direct foreign investment in India.
(July 7, 2008)