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Daimler's truckmaking joint venture with the Hero Group of India has picked a 1.6 sq km site at Oragadam near Chennai for its manufacturing base.

The plant, to be operated by Daimler Hero Commercial Vehicles, will produce up to 70,000 trucks in its initial phase and is scheduled to start up in 2010.

The trucks will be marketed under a new brand name and will be aimed initially at the Indian market, and then for markets where product requirements are similar to those in the Indian market.

The Oragadam site is surrounded by supplier parks and potential for more of them, and Daimler says it could secure sites there for future suppliers. The aim is for 80 per cent local content.

The joint venture between Daimler and Hero was announced on 21 April and the memorandum of understanding with the state of Tamil Nadu was signed in Chennai today.

The two companies have agreed to invest more than €700 million in the plant over the next five years. The equity capital brought in by Daimler and Hero amounts to €360 million, with a direct investment in India of €220 million by Daimler.