Daimler opts out of Eicher fray

Volvo, Renault, Mahindra International are now left in race

Germany's Daimler AG, known for its luxury cars and high-end commercial vehicles, has pulled out of the race to acquire a strategic stake in the Delhi-based commercial vehicles maker Eicher Motors.

The list of bidders is now believed to have shrunk to Volvo, Mahindra International, France's Renault and some other unidentified companies.

Speaking to Business Standard, a Daimler India executive stated, "We were in talks with Eicher, but we are not looking at having any partnership. We are not interested in that company."

Eicher Motors had invited partners for an alliance, including a strategic equity partnership, in order to become a complete commercial vehicles maker.

Although not much has been forthcoming from those believed to be in the fray, Eicher has maintained that it is in discussion with various potential partners. Daimler was earlier believed to be keen on the alliance with Eicher, just as Volvo, another force to reckon with in the global commercial vehicles market. Daimler is a leading truck maker internationally, competing with Volvo, MAN and Scania.

Earlier this year, Daimler returned to the Indian commercial vehicle scene, 38 years after it exited with the end of its technical collaboration with Tata Motors. The first vehicles from its new facility at Pune rolled out last week and these are aimed at customers in mining applications.

The company has also started work on building buses, which it will manufacture jointly with bus body builder Sutlej Motors. Daimler India will shift its operations to Chakan at the beginning of 2009, where a factory for the assembly of trucks and buses will be operational by that time.

The company is ready to pump fresh investments into its India operations as a part of plans to expand its portfolio of commercial vehicles.