Mumbai: Germany's Daimler AG, the world's largest truckmaker, has formed a joint venture with the Hero Group to make a range of commercial vehicles in India.

Stuttgart, Germany-based Daimler did not detail the investment amount or location plans as the proposal still needs government approval.

Dailmer said the two partners have already signed a shareholder agreement and are seeking regulatory approval. The transaction is expected to close at the end of the first quarter of 2008 when it plans to release details of the investment plans.

The joint venture would initially build trucks for the Indian market, with export production to follow later, Daimler said in a statement.

"The joint venture is first aimed at local production of light-, medium- and heavy-duty commercial vehicles for the Indian volume market," the statement said.

Daimler already makes Mercedes-Benz Actros trucks at its own plant in Pune, where the company also assembles Mercedes-Benz E-Class, C-Class and S-Class sedans.

Daimler has also a joint venture with Sutlej Motors Ltd. for building luxury bus bodies in India.

Daimler, however, said the move will not affect local manufacturing operations that the company already has in India.

Reports, meanwhile said Swedish commercial vehicle maker Scania is close to finalising a joint venture with auto parts maker Jay Bharat Maruti Ltd, although Scania denied the report.

The report, citing a source familiar with the development, said the venture would make a range of buses in India, to be available in the next 18 months.

Scania sells its heavy-duty trucks in India through a joint venture with engineering firm Larsen & Toubro Ltd.

Global commercial vehicle makers are targeting India, where the market has grown by about a fifth on average annually over the last three years, and is forecast to expand further with improving infrastructure and new emission and safety rules.

A host of foreign commercial vehicle manufacturers, including Volvo AB, MAN AG and Navistar International Corp., are setting up truck joint ventures in India to capitalise on growing demand for heavy transport vehicles.