Daimler and Kamaz expand their combined activities in Russia by establishing two joint ventures

Stuttgart – The Daimler AG and the Russian automaker Kamaz yesterday signed the agreements for the establishment of two joint ventures. The basis of the projects is the strategic partnership that Daimler Trucks established with Kamaz, Russian Technologies, and the investment bank Troika Dialog in December 2008. In connection with this partnership, Daimler Trucks acquired a 10 percent stake in Kamaz.

The establishment of the two joint ventures is a key strategic step for Daimler Trucks in the continued implementation of its Global Excellence Program. Launched in 2005, the Global Excellence Program also comprises a Growth and Market Penetration initiative aimed at enabling Daimler Trucks to enter new markets with high growth opportunities in order to strengthen the division’s global presence.

„With our strategic partnership with Kamaz we are in line with our Daimler Trucks’ growth strategy for the RIC markets”, said Andreas Renschler, Member of the Daimler AG Board of Management responsible for Daimler Trucks and Buses. „The implementation of the two joint venture projects between Kamaz and Daimler Trucks has brought us a giant step towards to the expansion of our presence in the Russian market. With both co-operations the know-how of Fuso and Mercedes-Benz Trucks in the areas of development, production, and sales will flow into the two joint ventures. That means, as soon as the Russian truck market will recover, we at Daimler Trucks are able to react on any additional truck demand immediately”, Andrea Renschler added.

Mr. Sergey A. Kogogin, Director General of KAMAZ Inc. said: “The development of the strategic partnership between Daimler Trucks and Kamaz is becoming increasingly important and is designed to ensure that the two partners will enjoy a long-term relationship. All the joint venture partners are sharing their expertise in the areas of technology and sales, generating new opportunities for Fuso and Mercedes-Benz Trucks on the Russian market. In addition, modern technologies are being introduced in Russia as a result of the two collaborations.”

The joint venture will be 50 percent owned by Fuso’s primary share¬holder Daimler and 50 percent owned by Kamaz, with each party contributing €4,1 million in initial equity. Kamaz will nominate the joint venture’s CEO and Head of Sales & Marketing, while Fuso will nominate the CFO and Head of Operations.

The new company will commence importing SKD kits from Japan, producing and selling the light-duty Fuso Canter trucks in the first quarter of 2010, following receipt of final approval by all relevant authorities. The trucks assembled in Russia will steadily increase their local content of parts and components.

The Fuso Canter trucks will be manufactured in Naberezhnye Chelny, where Kamaz has its production plant, and the new company’s sales headquarters will be in Kazan. With already around 11,000 used Fuso trucks on the Russian roads, the Fuso brand is already well known to the Russian customers, thus providing a strong basis to start new vehicle sales.

Dr. Albert Kirchmann, President and CEO of MFTBC, stated: “For MFTBC this Russia joint venture will represent a key step in positioning our company to serve future growth markets. Fuso Kamaz Trucks Rus will further strengthen our position as one of the leading manufacturers of commercial vehicles in Asia. At the same time, it will open up the Russian market for us, where we will sell the light-duty Canter truck. Kamaz’ market strength and comprehensive sales network provide us with a promising starting position for a successful market entry.”

The second joint venture established yesterday is also essential for opening up the Russian market, which is expected to be very dynamic once the economy begins to recover.

Daimler and Kamaz each own 50 percent of the joint venture Mercedes-Benz Trucks Vostok and are each contributing €5.9 million to its capital. The CEO of this joint venture will be Boris Billich, so far responsible for Sales & Marketing of Mercedes-Benz Commercial Vehicles in Russia. The production of the heavy-duty trucks Mercedes-Benz Actros and Axor will initially be conducted via the SKD assembly process in Naberezhnye Chelny, where Kamaz manufactures its trucks. The new joint venture’s sales headquarters for Mercedes-Benz trucks and buses and Setra coaches in Russia will be in Moscow. Truck production is scheduled to commence in the second quarter of 2010, while the sales operations of the new company Mercedes-Benz Trucks Vostok will begin in January 2010, following receipt of final approval by all relevant authorities.

Hubertus Troska, Head of Mercedes-Benz Trucks, said: “The joint venture Mercedes-Benz Trucks Vostok represents a significant step in the efforts of Mercedes-Benz to consistently penetrate the Russian market. As the market leader in Russia, our partner Kamaz has extensive expertise and a wide-ranging sales network that will provide us with optimal conditions for successfully expanding into a market that promises to grow rapidly once the global crisis is over.”