Daimler Hero Commercial Vehicles, the joint venture between Daimler AG and the Hero Group, today signed an MoU with the Tamil Nadu government to set up a truck manufacturing facility near Chennai for an investment of Rs 3,000 crore.
The commercial vehicle venture plans to roll out 70,000 vehicles a year in the medium and heavy duty segments. The plant will be set up at the SIPCOT Industrial Park, Oragadam, over 400 acres.
The heavy and medium duty commercial vehicle business is currently dominated by Tata Motors and Ashok Leyland, a Hinduja Group company, followed by Mahindra & Mahindra, Eicher Motors and Force Motors.
Talking to the media on the sidelines of the event, Sunil Kant Munjal, chairman of Hero Corporate Services, said that the plant, which will directly employ 3,000 people, was expected to start commercial production by 2010.
Several auto component units, too, are expected to come in the vicinity of the plant, taking the total employment opportunity to 20,000. Daimler India imports its Actros range of trucks in completely knock down (CKD) form and assembles them in Ludhiana, Punjab. This operation will cease to exist once the facility commences production in Tamil Nadu.
While Daimler AG has been present in the Indian commercial vehicle market for several decades that begun with a collaboration with the Tata Group, it is a new line of business for the Hero Group, which is India's two-wheeler maker.
Senior officials said that with this MoU in place and with Ashok Leyland Nissan setting up their new small truck factory in Tamil Nadu, the state is set to emerge as the country's largest manufacturer of commercial vehicles.
