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Daimler Preserves Its Stake in Tata Motors

By Motortrend India Staff   |   12 October,2008

Daimler, a German auto manufacturer, is exiting from its investments in large Indian car companies but will preserve its stake in Tata Motors. Currently, Daimler has a share of 6.64% with the Tata, which accounts for a turnover of Rs 900 crore.

The two companies, Tata and Daimler, have an alliance partnership for more than 50 years. Although the stake has fallen from 10% to 6.64%, the German auto manufacturer has no plans to revise its equity stake and hamper the 50 years old relationship.

The company is also expecting a high growth from the supply of auto components to the recently acquired Jaguar Land Rover brands by Tata.

As the global automobile sales are going down, most of the car manufacturers are looking at auto component companies as a key revenue earner. They are teaming together to produce and purchase the best of car engines and other technologies to boost profit and improve economies of sale.

Cerberus has also approached Daimler for the redemption of its stake in Chrysler, which accounts for 19.9%. Both the companies are in talks with each other and if the transaction becomes successful, the existing industrial relationship between the two will continue to prosper in the years ahead.

In the year 2007, Cerberus bought 80.1% of Chrysler from Daimler, which had brought an end to the 9 year relationship between Daimler and Chrysler.

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