New Delhi: Government today gave approval to a Rs 1650 crore investment by Germany's Dailmer AG on its proposed joint venture with India's Hero Group for manufacturing commercial vehicles.

Daimler's investment of Rs 1650 crore will constitute 60 per cent of the equity capital of the joint venture, an official spokesperson told reporters here after a meeting of the Cabinet Committee on Economic Affairs. The JV will design, manufacture and sell commercial vehicles of above 2 tonnes for Indian as well as overseas market, the official added.

Moreover, the JV would also source components from India for Daimler's global requirements, besides undertaking research and development activity for new products and variants. Towards the end of last year, Daimler and Hero Group had announced that they have agreed to form a joint venture for manufacturing light, medium and heavy commercial vehicles.

The joint venture would initially manufacture LCVs and MHCV's for the domestic market followed by exports at a later stage. The vehicles produced would be variants of Daimler Trucks current product portfolio, which would be fine tuned to suit the Indian market conditions. Daimler Trucks presently operates in India through a commercial vehicles and bus Assembly plant in Chakan near Pune, Maharashtra.

It has five truck brands Mercedes-Benz, Freightliner, Sterling, Western Star and Mitsubishi Fuso. The company sold as many as 5,16,000 trucks globally and had revenues of 31.8 billion pounds last year.

Source : PTI