Daimler AG, the world's largest commercial vehicle maker, picked Chennai as the site for a new plant in India, where it will initially assemble up to 70,000 trucks a year with Indian joint venture partner Hero, GN reported.
Total investment in the joint venture will amount to more than $1.1 billion over the next five years, Daimler said in a statement on Monday.
"The key factors leading to the choice of the Chennai site were proximity to important suppliers, the city's infrastructure, transportation connections and the large number of well-qualified skilled workers in the region," the company said.
Daimler Hero Commercial Vehicles will produce the trucks starting in 2010 under a new brand name for the Indian market and later for export as well.
Chennai, India's fourth largest city, is vying with Pune in the state of Maharashtra to be India's automotive capital.
BMW AG, Ford Motor Co and Hyundai Motor Co already manufacture cars in Chennai, while Renault SA and its alliance partner Nissan Motor Co are building a new plant there.
Indian truckmaker Ashok Leyland also assembles vehicles in Chennai.
Hero Group and Honda Motor Co each hold 26 per cent in publicly listed Hero Honda Motors Ltd.