Citing the rather poor performance of the Indian heavy truck segment, the Hero Group has decided to pull out of its joint venture with Daimler! With the Hero Group quitting the collaboration for making commercial vehicles in India, Daimler will buy back Hero's 40 percent stake - worth 16 million euros - in Daimler Hero Motor Corporation (DHMC).

While Daimler says the Hero Group back-out was due to financial constraints, the Chairman of Hero Corporate Services, Sunil Kant Munjal, cited plunging commercial vehicle sales in India - which dropped 22 percent in FY 2009 - as the reason.

Munjal said: "We will not like to invest in such an uncertain economic situation and have decided to venture out."

Though let down by its local partner, Daimler is not daunted - it intends going ahead alone with the venture! The determined German auto giant - the maker of Mercedes Benz cars - said on Wednesday that, over a period of four years, it would make over 700-million-euros investment to establish itself in the subcontinent and, in due course, use it as a "bridgehead to other emerging markets."

In reaction to the Hero Group pull out and the company's single-mindedness of purpose, Daimler Trucks' chief, Andreas Renschler, said in a statement: "I really regret the Hero Group's decision, but Daimler Trucks will nonetheless enter the truck volume market in India."