Daimler says "tata" to Tata Motors.
The auto business can make for some strange bedfellows, but Germany’s Daimler AG says it has decided to end its ties to the Indian automaker Tata Motors.
Daimler expects to take in $410 million for its shares in Tata, where it held a roughly 5.3% stake. That’s good news considering the German company’s recent financial problems, and will show up on the books for the first quarter.
The original investment reflected Daimler’s interest in staking a position in the booming Indian automotive market. Tata is one of the lead players there, and has been targetting first-time buyers with the stripped-down Nano which, at just over $2,000, competes against motorcycles and other basic forms of transportation.
But in a statement announcing the sale, Daimler said it was now in and “excellent position to capitalize on the growth potential of the Indian (market) by strengthening its own activities in both the car and commercial vehicle sectors.
A new plant, in the city of Pune, is now producing both Mercedes-Benz E-Class and S-Class models, and the brand now has dealers and service centers in 25 cities across India.
Volumes are still small, with sales of just 3,200 Mercedes-Benz passenger cars in India for all of 2009, but the maker notes that sales doubled during January and February of this year.