( AFP ) - German auto giant Daimler and India's Hero Group have agreed to form a joint venture to produce light, medium and heavy duty commercial vehicles for the Indian market, Daimler said Friday.
Production for export markets is expected to follow at a later stage, a statement said, without providing financial details.
Both companies signed a shareholders' agreement to be submitted to India's Foreign Investment Promotion Board for formal approval, with the deal expected to close in the first quarter of 2008.
The statement quoted Andreas Renschler, head of Daimler Trucks as saying: "In Hero we have found an excellent, experienced partner with a long tradition of manufacturing and know-how of the local industry.
"We believe this is a strong foundation for a long-term co-operation in one of the world's most dynamic markets."
Hero Group posted sales in 2006 of four billion dollars (2.76 billion euros) and is already involved in a joint-venture with the Japanese group Honda to produce motorcycles.
Daimler's truck division recorded sales of 31.8 billion euros last year and expects to post an operating profit this year equivalent to the record 2006 figure of 2.0 billion euros.