New Indian-German joint venture Daimler Hero Commercial Vehicles (DHCV), will build its manufacturing plant in Chennai, India’s fourth-largest city, the automakers said on Monday.
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Chennai got the nod due to its proximity to important suppliers, infrastructure, transport connections and the large number of well-qualified skilled workers in the region.
The 400-acre site is in Oragadam, handy to several supplier parks where Daimler Hero Commercial Vehicles could also secure sites for future suppliers.
Construction begins soon of the new factory which will produce commercial vehicles under a new brand name for both the Indian and export markets.
Production for India starts in 2010 with 70,000 trucks in the initial phase of operation.
Production “for export markets whose product requirements are similar to those of the Indian market” will follow later.
DHCV is aiming to achieve local content of up to 80%.
Total investment in the joint venture will amount to over EUR700m over the next five years.
Of this, Daimler will contribute EUR220m as a direct foreign investment in India.
