After European and US truck makers, it is now the turn of Korean automotive giant Hyundai Motor to kick start its commercial vehicle business in India. The company is said to have initiated talks with Eicher group with an intention to acquire a stake in Eicher Motors. Hyundai is the third overseas company to evince interest in Eicher Motors, India's third largest commercial vehicle maker, after DaimlerChrysler and Volvo.
Although Eicher officials have earlier denied that they intend to sell their stake in Eicher Motors, a industry source says that Hyundai does not want to wait and build its businesses from scratch. A Hyundai delegation, which was recently in India, is said to have met Eicher officials to look for avenues for colloboration or even a complete buyout. A senior Eicher Motors official, who did not wish to be named, said: "We talk to companies in similar business as a matter of routine. It will be speculative to read anything into these discussions."
In October 2006, reports first surfaced that DaimlerChrysler had initiated talks with Eicher to seek an increased participation in the company. Daimler indirectly holds a small stake in Eicher Motors, through its investments in Mitsubushi. Mitsubushi, Eicher Motors's earlier technical partner, holds a 3.56% stake in the company. Eicher's executive chairman S Sandilya had dismissed the reports as speculative.
However, an investment banker who specialises in automotive deals, says that there is good reason why Eicher and even India's second biggest truck maker Chennai-based Ashok Leyland are rumoured to be on the block.
Hindujas, who control Ashok Leyland, had several rounds of meetings with Volvo to sell a stake in the company. Talks fell through as Hindujas were not willing to give a firm commitment to transfer control to the Swedish company.
According to the banker, Indian truck makers do not have enough technology to make sophisticated trucks. There are two fundamental components that drive the truck__the engine and the gear box. Now, Indian companies, including the No.1 player still don't have bigger engines to power long haul trucks that ply on expressways; or for that matter vehicles like tippers deployed in the infrastructure sector.
Despite having access to Daewoo technology, Tata Motors had to incorporate Iveco's latest engines in its trucks in Korea to stay in tune with competition. Tata Motors is said to be further mulling a further technical colloboration with Iveco to help it refine the all-new truck model that will be launched next year.
Says an technical expert from Volvo: "The fast changing emission norms and sophistication of engine technology require massive investment and long lead times for development."
With growth in sectors like infrastructure and mining coupled with demand for faster trucks, Indian companies are beginning to feel the heat from foreign players. Trucks sold by companies like Volvo, Scania and Force-Man are expensive compared to Indian counterparts, but each year these companies are selling growing numbers.
Source: http://timesofindia.indiatimes.com/Hyundai_eyes_stake_in_Eicher_arm/articleshow/2202666.cms
Although Eicher officials have earlier denied that they intend to sell their stake in Eicher Motors, a industry source says that Hyundai does not want to wait and build its businesses from scratch. A Hyundai delegation, which was recently in India, is said to have met Eicher officials to look for avenues for colloboration or even a complete buyout. A senior Eicher Motors official, who did not wish to be named, said: "We talk to companies in similar business as a matter of routine. It will be speculative to read anything into these discussions."
In October 2006, reports first surfaced that DaimlerChrysler had initiated talks with Eicher to seek an increased participation in the company. Daimler indirectly holds a small stake in Eicher Motors, through its investments in Mitsubushi. Mitsubushi, Eicher Motors's earlier technical partner, holds a 3.56% stake in the company. Eicher's executive chairman S Sandilya had dismissed the reports as speculative.
However, an investment banker who specialises in automotive deals, says that there is good reason why Eicher and even India's second biggest truck maker Chennai-based Ashok Leyland are rumoured to be on the block.
Hindujas, who control Ashok Leyland, had several rounds of meetings with Volvo to sell a stake in the company. Talks fell through as Hindujas were not willing to give a firm commitment to transfer control to the Swedish company.
According to the banker, Indian truck makers do not have enough technology to make sophisticated trucks. There are two fundamental components that drive the truck__the engine and the gear box. Now, Indian companies, including the No.1 player still don't have bigger engines to power long haul trucks that ply on expressways; or for that matter vehicles like tippers deployed in the infrastructure sector.
Despite having access to Daewoo technology, Tata Motors had to incorporate Iveco's latest engines in its trucks in Korea to stay in tune with competition. Tata Motors is said to be further mulling a further technical colloboration with Iveco to help it refine the all-new truck model that will be launched next year.
Says an technical expert from Volvo: "The fast changing emission norms and sophistication of engine technology require massive investment and long lead times for development."
With growth in sectors like infrastructure and mining coupled with demand for faster trucks, Indian companies are beginning to feel the heat from foreign players. Trucks sold by companies like Volvo, Scania and Force-Man are expensive compared to Indian counterparts, but each year these companies are selling growing numbers.
Source: http://timesofindia.indiatimes.com/Hyundai_eyes_stake_in_Eicher_arm/articleshow/2202666.cms