Hero Group takes exit route from Daimler JV

Hero Group takes exit route from Daimler JVLess than a year after signing a joint venture with Germany’s Daimler to manufacture commercial vehicles in the country, the Munjals of the Hero Group has pulled out of a joint venture, citing the tough economic conditions.

But Daimler has decided to buy out Hero's 40% stake for Rs 105 crore. The company will now run the commercial vehicle business independently in India.

The Germany-based company informed that it plans in India were on track and the proposed plant at Chennai would start as scheduled in 2010.

The firm intended to opt for local production of light, medium and heavy-duty commercial vehicles for the Indian market, followed by production for the export markets.

According to sources, the light and medium commercial vehicles are scheduled to launch by 2010, while the heavy commercial vehicles by 2012.

Hero Daimler had signed a 60:40 JV in April 2008, which had intended to set up a new plant in Chennai with an investment of Rs 4,400 crore.

Under the arrangement, Daimler had committed to invest Rs 1,368 crore, while the Hero group was to bring in Rs 900 crore.

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