Daimler has opened a new truck factory in the south Indian auto hub of Chennai. The centrepiece of its INR44bn (US$850m) investment in India will build Bharat Benz models designed for the local market, competing with Tata Motors Ltd, as well as the specialist Mercedes Actros line.

According to Reuters, the company said the factory would start commercial vehicle production in the third quarter of this year, with an initial capacity of 36,000 vehicles, though maximum capacity is over 70,000.

“It is the only Daimler plant in the world that houses products which combine Indian engineering with German and Japanese DNA under a single roof,” Daimler chairman Dieter Zetsche said.

Daimler India Commercial Vehicles managing director Marc Llistosella told The Hindhu the plan was to start with 25-tonne trucks and then move into 31-tonne. Seventeen Bharat Benz models would be launched in the 18 months from September.

Daimler is also moving heavy Actros truck production from Pune and this should be completed by August-September, Llistosella said. The Actros is popular in the mining segment in India.

Exports from Oragadam should start in 2013. Daimler was targeting 90% localisation of the truck value by 2015 and, of this, 50% would be from Tamil Nadu [state].

But Andreas Renschler, Daimler Trucks and Buses head, said the first priority was catering to the domestic market. The company might look at exports to Africa, the Far East and the Middle East later.

The Oragadam plant — one of the three Daimler plants worldwide to combine truck and engine production — employs 1,400 people and would increase.