Daimler says to assemble trucks in India soon

DaimlerChrysler (DCXGn.DE: Quote, Profile, Research) plans to assemble Mercedes-Benz trucks in India soon, to tap the growing demand to transport freight in Asia's third-largest economy, the company said on Wednesday.

As a first step, it has received a "no objection certificate" from India's top truck maker, Tata Motors Ltd. (TAMO.BO: Quote, Profile, Research), in which Daimler owns 6.8 percent.

"This is a common procedure necessary if a foreign company with an equity stake greater than 3 percent in a domestic company would like to start its own operations," Wilfried Aulbur, chief executive of DaimlerChrysler India, said in a statement.

"DaimlerChrysler plans not only to import complete vehicles, but to assemble semi-knocked down Mercedes-Benz trucks in India in the near future," he said.

Daimler imports the Actros range of heavy trucks and is setting up a plant in the western Maharashtra state with a capacity to make 5,000 luxury Mercedes cars a year.

The plant would also be used to make trucks, a spokesman said, adding that the range and capacity have not been finalised.

India's bus and truck market, the world's fifth-largest by volume, is growing quickly as better roads and a focus on infrastructure are boosting demand for transport of freight.

The market is dominated by Tata Motors and Ashok Leyland Ltd. (ASOK.BO: Quote, Profile, Research), but global firms are keen for a share.

Sweden's Volvo (VOLVb.ST: Quote, Profile, Research) is ramping up its capacity, while Germany's MAN AG (MANG.DE: Quote, Profile, Research) has a joint venture with Force Motors Ltd. (FORC.BO: Quote, Profile, Research) for trucks and a unit of Navistar International (NAVZ.PK: Quote, Profile, Research) has a deal with Mahindra & Mahindra Ltd. (MAHM.BO: Quote, Profile, Research).