Daimler has signed an agreement to establish a bus joint venture in Tashkent with full contract closure expected in the third quarter of 2010.

The automaker inked the deal with Uzavtosanoat JSC to assemble and sell “a minimum” of 600 coaches, intercity, town and minibuses for Uzbekistan and export to neighbouring countries.

“We have been selling Mercedes-Benz buses to customers in Uzbekistan and, in particular, in Tashkent since 1994,” said Daimler truck and bus chief Andreas Renschler.

“We have created the basis for producing a wide range of buses in the country and for serving the neighbouring growth markets with locally manufactured products.”

Daimler subsidiary Mercedes-Benz Buses Central Asia will own a majority 51% stake in the new JV, with the remaining 49% held by Uzavtosanoat. The new company will have US$8m of equity capital.

Uzavtosanoat will provide the factory buildings; Daimler Buses will deliver the Mercedes-Benz chassis and the bodies will be built in collaboration with Mercedes-Benz’s body-building partner, Manufacturing Commercial Vehicles (MCV).

“Thanks to [government support], we were able to successfully complete our negotiations and attract into the automotive industry of Uzbekistan another very important strategic partner,” said Uzavtosanoat JSC deputy chairman Gairat Niyazov.

The JV will also work on sourcing locally made components as Daimler Buses head Hartmut Schick said: “Local production will significantly improve market opportunities for Daimler Buses in Uzbekistan and central Asia,” he said.

“With Uzavtosanoat, we know that we have a strong, professional and reliable partner that knows the central Asian markets inside-out and has considerable experience in production and sales.”

The first batch of 600 vehicles should be delivered by September with the JV also establishing a sales and service network.

Existing Uzavtosanoat and Daimler dealer networks in neighbouring countries will also be used.

To date, Daimler Buses has sold around 1,000 buses to Tashkent.

The city’s existing fleet of Mercedes-Benz 0405 city buses is gradually being replaced with Conecto models.