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Apr 16, 2009, 01.30 PM IST | Source: CNBC-TV18

Hero pulls out of Rs 4400cr Daimler JV

Almost a year after Hero joined hands with Daimler to enter the commercial vehicle space, Hero Group wants out. Hero has pulled out of the Rs 4,400 crore joint venture (JV). Going ahead, Daimler will buy out Hero's 40% stake for Rs 105 crore and Daimler will run the commercial vehicle business independently in India.

Swati Khandelwal, CNBC-TV18

Almost a year after Hero joined hands with Daimler to enter the commercial vehicle space, Hero Group wants to pull out now. Hero has pulled out of the Rs 4,400 crore joint venture (JV), CNBC-TV18s Swati Khandelwal reports.

Hero has pulled out of commercial vehicle JV with Daimler because of the economic slowdown and the company doesn't want to go ahead with any business in such a situation. Going ahead, Daimler will buy out Hero's 40% stake for Rs 105 crore and Daimler will run the commercial vehicle business independently in India.

Daimler will also set up the proposed plant in Chennai and is expected to start production in 2010-2011. However, Daimler feels there could still be some delays.

When contacted, Hero said "The reason to pull out is the current economic slowdown and we would not like to commit such big investment in the circumstances.

Hero Daimler was a 60:40 JV with investments envisaged of Rs 4400 crore over five years, which was signed in April 2008. Hero Daimler JV was to manufacture light and medium commercial verhicles initially, and heavy duty vehicles then.

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