Daimler AG, the world’s largest truck maker and Hero Group of the esrtwhile Hero Honda, the largest 2 -Wheeler maker in India have entered into a 4400 Crore Rupees JV (Joint Venture) to build commercial vehicles in India. The JV as of now is for a duration of 5 years, starting 2010.

 The company plans to enter the market by 2010. The collaboration comes at a time when the booming economy is driving commerical vehicle sales. The joint venture was originally announced in December last year, modalities of which have been worked out now and were unveiled on Monday.

Hero group will hold 40% equity stake in the company while rest of it, 60% will be with Daimler. The German company will invest close to 1386 Crore Rupees while Hero group will put in 900 Crore Rupees to acquire the 40% stake. Total investment including equity and debt will be close to 4400 Crore rupees.

Marc Llistosella, who directed the JV from Daimler side will be th CEO of the Daimler Hero Motor Corporation while Amit Chaturvedi, presently President, Strategy and Business Development at Hero Corporate serivces will act as the co-CEO. Sunil Kant Munjal will be the chairman of the new company.

The group JV is targetting a localisation content of 80% and is looking to set up its green field plant in either Haryana, Pune or Chennai. The initial capacity of the plant would be 70,000 units. The company will initially concentrate on light and medium commercial vehicles while heavy commercial vehicles will only be manufactured after 2012. The company will also export to other emerging markets. The other details including the venue for setting up the plant, will be deicded in another 2-3 weeks time, according to Sunil Kant Munjal, the Chairman of the company.