With the share price of Indian company Tata Motors having sky-rocketed over the last year, Daimler has decided to sell all 5.34 per cent of its ordinary shares in the car manufacturer.
The German carmaker will pick up a cash inflow of around €300million thanks to its sale of the shares. According to Daimler, the decision was reached because it is in “an excellent position” to capitalise on the Indian passenger and commercial vehicle market and is continuing to identify its own activities there. As such, an equity participation in Tata Motors is no longer necessary and the sale was completed in full consultation with Tata.
Indeed Daimler is gradually making in-roads into the Indian market. It has been producing Mercedes-Benz cars there since 1995; it established a research and development centre in Bangalore in 1996; and in February last year a new plant was opened in Pune for the E-Class and S-Class models.
The brand is also represented with showrooms and service centres in 25 Indian cities and in the first two months of 2010, Mercedes-Benz doubled its sales in the country to 800 vehicles. The company now hopes that the brand will grow at a double digit rate for the remainder of the year.
Meanwhile, Daimler India Commercial Vehicles Ltd took over the Fuso branded commercial vehicles in the country at the beginning of the year with Daimler Trucks having founded its own production company, known as Daimler India Commercial Vehicles Limited, in 2009.
