Daimler 'very close' to truck deal for India

DETROIT (Reuters) - Daimler AG (DAIGn.DE) is very close to announcing a joint venture with an Indian partner to produce commercial trucks for the Indian market, a senior Daimler executive said on Friday.

"In India, we are very close to an announcement," Andreas Renschler said, speaking to reporters at an event in Detroit to mark the launch a new heavy-duty diesel engine. "We have found a partner."

Daimler will also decide late this year or early next year where to build a truck assembly facility in Russia, said Renschler, who heads the German automaker's Daimler Trucks unit and is a member of the board of management.

Daimler, which ranks as the world's largest maker of medium- and heavy-duty trucks, is targeting growth in emerging markets including India, Russia and China, but has found it must take a different approach in each, he said.

For the Russian truck market, fleet operators are looking for vehicles that can be used in Europe, with some signs of demand for the long-haul Freightliner-branded trucks Daimler builds in the United States, he said.

Renschler said the new Russian truck facility would work from what are known as "complete knock-down" kits.

Such kits are often used by automakers to hold down costs by exporting largely complete vehicles that undergo final assembly in the market where they will be sold.

Daimler has experience with building such kit assembly facilities in Brazil, Argentina, Turkey and Mexico and will target Russia next, Renschler said.

"We will come up at the end of this year or early next year with a decision," Renschler told reporters in Detroit. "We have to look at what is the best site, so we are not in a hurry there."

Daimler held about 17 percent of the global market for medium- and heavy-duty trucks in 2006 with its brands that included Mercedes-Benz, Freightliner and Mitsubishi Fuso.

The largest Indian truck maker is Tata Motors Ltd (TAMO.BO), which had 8 percent of the global market on a volume basis, according to industry statistics.

"We have a very good position in our traditional markets," Renschler said. "The real growth, if you look to the world market, will happen -- or is already happening -- in China, India and probably also Russia."

In China, Daimler is still waiting for government approval to proceed with a commercial vehicle joint venture with Beiqi Foton Motor Co (600166.SS), Renschler said.

"We are looking for government approval. In China, that's not easy."

Separately, Renschler also said the automaker would save 600 million euros from a global engine platform for its heavy-duty trucks, once the system is fully implemented in North America, Europe and Asia.

The first step in that program was the launch of a new heavy-duty engine being built by Daimler subsidiary Detroit Diesel after a $1.5 billion development program.

Daimler will use the DD15 engine, which offers up to 560 horsepower, as the basis for engines that will be used in future truck models for sale in Asia and Europe.

By sharing 90 percent of the engine parts in those designs, Daimler expects to make major savings, Renschler said.

Looking ahead, Renschler said he expects demand for commercial trucks in the U.S. market to remain under pressure until at least the first quarter of 2008.

Despite the downturn in U.S. demand for commercial trucks in 2007, Renschler said he expected Daimler's Freightliner LLC would remain profitable for the year.

"I think it's good what we have achieved through October but I'm sure we will stay (profitable) until December," he said.

(Reporting by Kevin Krolicki)