MAN is expected to pick up a 14% stake in Bajaj Tempo, its joint venture partner in India.
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Bajaj Tempo is expected to bring in MAN AG as an equity partner by issuing shares to the German truck maker through the preferential allotment route in the next few weeks.
The stake of the Firodia family, who own over 50%, will decline. Significantly, two-wheeler maker Bajaj Auto also owns 24% of Bajaj Tempo.
Bajaj Tempo’s technical collaboration with MAN AG will involve expansion, modernisation and establishment of new facilities for a total investment of INR2.5-3.5 billion.
The company will build a new production facility for engines near Pune and an assembly line for vehicle cabs.
MAN will help the company develop modern vehicle cabs and engines, while Bajaj Tempo will be able to export components and assemblies, including precision engine parts, to the German firm.
The new range of MCVs and HCVs is likely to be launched in the domestic market later this year.
In a separate move, Bajaj Tempo is changing its name to Force Motors owing to objections by DaimlerChrysler over the use of the Tempo brand.
Deepesh Rathore / Tilak Swarup
