Daimler Hero Commercial Vehicles production plant to be located in Chennai

hanmust · 7th July 2008, 18:15

Stuttgart/Delhi, Jul 07, 2008

New truck plant to be constructed in Chennai, Southern India
Joint venture acquires 1.6 square kilometers (approx. 400 acres) plot
Site decision based on proximity to suppliers, port, good infrastructure and skilled labour

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.

About Daimler Trucks
Daimler Trucks is a division of Daimler AG and the world’s leading truck manufacturer. Its five leading truck brands - Mercedes-Benz, Freightliner, Sterling, Western Star, and Mitsubishi Fuso - generated revenues of € 28.466 billion in 2007 on sales of more than 467,667 units worldwide.

About the Hero Group
The Hero Group, which was founded more than 50 years ago by the Munjal family, is a conglomerate with numerous divisions and products that generate annual revenues of over $4 billion. The company has an excellent network and comprehensive knowledge of the Indian market.
Hero Honda Motors Ltd. - a joint venture between the Hero Group and Honda - is the world’s leading motorcycle manufacturer and has built more than 20 million motorcycles for the Indian market to date.

smsrini · 7th July 2008, 18:25

Mitsubishi Fuso is very likely to be the brand they will bring to India under this JV. Mercedes Benz trucks ( Actros ) are already selling via the CBU route here..

bhp1 · 7th July 2008, 19:43

Good that new ventures are coming up. I just hope GOVT. to frame a policy for equitable distribution of projects in the country. In this way simultaneous growth would take place & move the country ahead at a faster pace. Just pockets of modernization would aid in widening the gap between rich & poor.

jagan0677 · 7th July 2008, 20:51

Quote:

Originally Posted by hanmust

Starting in 2010, the plant is to produce up to 70,000 trucks in its initial phase of operation.

I am skeptical about the volumes in year of commencement of operations. Even if its in the 10-15T range, 70000 in first year seems ambitious.

Looks like the CV industry in India is going to go through some pain with so many new entrants.

AMATMO · 7th July 2008, 20:59

how much would this reduce the price for the truck?

what is it now,how much would a cbu cost?
and what is likly to be the price after is built here?

dude131 · 8th July 2008, 08:45

According to the article on Economic Times states " DHMC will launch an all new brand of commercial vehicles in India and for export. The Stuttgart based Daimler will not bring its existing international truck brands - Mercedes Benz, West Star, Freightliner, Sterling and Mitsubishi Fuso - but develop a new full channel of low-cost range of trucks for the domestic and export market."

Would have been nice to see brands like Freightliner or Fuso on Indian roads.

Source: Economic Times, 2008, "Daimler-Hero JV to start in 2010, make 70,000 trucks", Bennett Coleman & Co. Ltd. viewed 7th July 2008.
Daimler-Hero JV to start in 2010, make 70,000 trucks- Automobiles-Auto-News By Industry-News-The Economic Times

Also "hanmust" please cite the source of your article.

snaronikar · 8th July 2008, 18:17

Saw this in today's Hindu news paper. Looks like Chennai is heading for one major hub for auto makers and auto parts makers (maybe next only to Pune).

aaggoswami · 8th July 2008, 23:09

Quote:

Originally Posted by hanmust

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.

One more link. The article states that the company is gunning for a high level of local content. Its good news as the products will now be more sensibly priced.

The link is :
Daimler-Hero venture to have high local content

Quote:

The article states :

Quote:

Tuesday, July 08, 2008
Daimler-Hero venture to have high local content
Chennai, The joint venture of Daimler AG and Hero Group, which today formally signed a MoU
with the Government of Tamil Nadu for setting up a Rs 4,746-crore greenfield commercial vehicles
facility in the State, will start with a high level of localisation ? 80 per cent.

The plant of Daimler-Hero Motor Commercial Vehicles Ltd (DHCVL) is coming up on a 400-acre plot at Oragadam,
near Chennai, a growing industrial suburb, sandwiched between the two automotive hubs of Maraimalainagar and Sriperumbudur.

70,000 vehicles

From 2010, the joint venture will produce about 70,000 light and medium duty commercial vehicles.

The project will provide employment to 3,000 people and generate over 20,000 indirect jobs.

The ?80 per cent local content? aspect of the project has enthused the auto components manufacturers here,
who believe that they may need to put in fresh investments to cater to DHCVL.

A number of auto parts vendors told Business Line today that with the existing players also ramping up volumes,
it would be difficult to supply to the new comer from their existing plants.

?700-m investment

DHCVL will invest over ?700 million (Rs 4,746 crore) over the next five years, of which ?350 million will be the equity.

Of this, Daimler will contribute ?220 million as foreign direct investment.

DHCVL decided on Chennai considering its proximity to vendor base, infrastructure, transportation connectivity and
the large number of skilled workers.

Source : Business Line (Online Edition) (7/7/2008)

hanmust · 9th July 2008, 14:32

The source was from media.daimlerchrysler.com.

When I talked to Mr.Wielfred Aulbur, CEO & MD of MB-India, he mentioned that in this JV either a new brand will be brought out or the exsisting brands like Fuso, or so will be rolled out to Indian market. Anyway they won't bring the Mercedes benz brand under this JV.

directinjection · 9th July 2008, 17:06

Quote:

Originally Posted by hanmust

When I talked to Mr.Wielfred Aulbur, CEO & MD of MB-India, he mentioned that in this JV either a new brand will be brought out or the exsisting brands like Fuso, or so will be rolled out to Indian market. Anyway they won't bring the Mercedes benz brand under this JV.

That's because they need to protect Tata Motors in which MB still holds over 6% equity.

7th July 2008, 18:15	#1
hanmust Senior - BHPian Join Date: Dec 2005 Location: Calicut Posts: 2,481 Thanked: 262 Times View My Garage	Daimler Hero Commercial Vehicles production plant to be located in Chennai Stuttgart/Delhi, Jul 07, 2008 New truck plant to be constructed in Chennai, Southern India Joint venture acquires 1.6 square kilometers (approx. 400 acres) plot Site decision based on proximity to suppliers, port, good infrastructure and skilled labour 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. *About Daimler Trucks* Daimler Trucks is a division of Daimler AG and the world’s leading truck manufacturer. Its five leading truck brands - Mercedes-Benz, Freightliner, Sterling, Western Star, and Mitsubishi Fuso - generated revenues of € 28.466 billion in 2007 on sales of more than 467,667 units worldwide. *About the Hero Group* The Hero Group, which was founded more than 50 years ago by the Munjal family, is a conglomerate with numerous divisions and products that generate annual revenues of over $4 billion. The company has an excellent network and comprehensive knowledge of the Indian market. Hero Honda Motors Ltd. - a joint venture between the Hero Group and Honda - is the world’s leading motorcycle manufacturer and has built more than 20 million motorcycles for the Indian market to date.
	() Thanks

7th July 2008, 18:25	#2
smsrini Senior - BHPian Join Date: Sep 2007 Location: Bangalore Posts: 1,115 Thanked: 426 Times View My Garage	Mitsubishi Fuso is very likely to be the brand they will bring to India under this JV. Mercedes Benz trucks ( Actros ) are already selling via the CBU route here..
	() Thanks

7th July 2008, 19:43	#3
bhp1 BANNED Join Date: Jul 2008 Location: NA Posts: 513 Thanked: 4 Times	Good that new ventures are coming up. I just hope GOVT. to frame a policy for equitable distribution of projects in the country. In this way simultaneous growth would take place & move the country ahead at a faster pace. Just pockets of modernization would aid in widening the gap between rich & poor.
	() Thanks

7th July 2008, 20:59	#5
AMATMO Senior - BHPian Join Date: Jul 2007 Location: Bangalore\GOA Posts: 1,456 Thanked: 7 Times	how much would this reduce the price for the truck? what is it now,how much would a cbu cost? and what is likly to be the price after is built here?
	() Thanks

8th July 2008, 08:45	#6
dude131 BHPian Join Date: May 2008 Location: Goa / Melbourne Posts: 125 Thanked: Once	According to the article on Economic Times states " DHMC will launch an all new brand of commercial vehicles in India and for export. The Stuttgart based Daimler will not bring its existing international truck brands - Mercedes Benz, West Star, Freightliner, Sterling and Mitsubishi Fuso - but develop a new full channel of low-cost range of trucks for the domestic and export market." Would have been nice to see brands like Freightliner or Fuso on Indian roads. Source: Economic Times, 2008, "Daimler-Hero JV to start in 2010, make 70,000 trucks", Bennett Coleman & Co. Ltd. viewed 7th July 2008. Daimler-Hero JV to start in 2010, make 70,000 trucks- Automobiles-Auto-News By Industry-News-The Economic Times Also "hanmust" please cite the source of your article. Last edited by Jaggu : 8th July 2008 at 10:36. Reason: Font tag
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8th July 2008, 18:17	#7
snaronikar Senior - BHPian Join Date: Jun 2007 Location: Bengaluru Posts: 2,845 Thanked: 29 Times View My Garage	Saw this in today's Hindu news paper. Looks like Chennai is heading for one major hub for auto makers and auto parts makers (maybe next only to Pune).
	() Thanks

9th July 2008, 14:32	#9
hanmust Senior - BHPian Join Date: Dec 2005 Location: Calicut Posts: 2,481 Thanked: 262 Times View My Garage	The source was from media.daimlerchrysler.com. When I talked to Mr.Wielfred Aulbur, CEO & MD of MB-India, he mentioned that in this JV either a new brand will be brought out or the exsisting brands like Fuso, or so will be rolled out to Indian market. Anyway they won't bring the Mercedes benz brand under this JV. Last edited by hanmust : 9th July 2008 at 14:34.
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