The Hindu Business Line
Daimler, the German maker has finally confirmed it had sold all of its 5.34 per cent ordinary shares of Tata Motors to various investors, bringing it in a tidy cash inflow of €300 million.
The German firm has established itself firmly in the Indian market, making the need for Tata as a partner effectively redundant. Daimler said that in the first two months of 2010 sales of Mercedes Benz in India nearly doubled and that it intended to grow at a double digit rate for the year as a whole.
Daimler's truck division – Daimler India Commercial Vehicles Ltd - is also building a plant in Chennai which is expected to begin production in 2012.
“Daimler is in an excellent position to capitalise on the growth potential of the Indian passenger and commercial vehicle markets and continues to intensify its own activities there,” said the company in a statement, adding that as a result having an equity stake in Tata was “no longer necessary.” “Relations between the two companies are excellent and will not be adversely affected by the sale.”
Some believe that Daimler's involvement in Tata had failed to deliver the opportunities they had hoped for when they first took on the stake. “Over the years they had the stake, they haven't really made any progress regarding any of the projects; so from Daimler's perspective it was essentially dead capital,” said a Munich based analyst.