Mercedes India May Part Its Ways With Tata Motors

It seems like Mercedes Benz has finally decided to bid adieu to Tata Motors

. The German auto giant is believed to be preparing to part its ways from its fifty years old partner by erecting its own paint shop instead of renewing the contract with Tata Motors. According to a statement given by Mr Wilfried Aulbur, MD and CEO of Mercedes Benz India, to a leading business news daily, that the company is looking at its own paint shop and discussing that option with its management globally.

Since the starting of its operations in the Indian market Mercedes Benz is using Tata Motor's paint shop at Pune facilities. According to the industry sources, Mercedes India may decide to come up with a new paint shop at its recently established plant at Chakan near Pune. The contract between both the companies will be due for renewal in the month of December 2010, and if the agreement ends at that time, it will mark the end of one of the oldest local-global partnership in India.

The partnership between these two auto giants traces its roots way back to the year 1954 when both the companies decided to manufacture medium-size commercial vehicles jointly. The first ever joint venture vehicle was launched soon after the tie-up, though the deal lasted for mere 15 years.

Second time when these firms entered into a partnership was in the year 1994 when both the companies entered a joint venture to manufacture the Mercedes Benz passenger cars in India. However, in just 6 years, Tata Motors sold all of its stake in JV to Mercedes Benz India in year 2000-2001.

Daimler group has invested heavily (around $64 million) in the Mercedes India's Chakan Plant and is also planning to inject $1 billion in the establishment of a commercial vehicle plant.

by: cardekho

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