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STUTTGART, Germany — Daimler announced Tuesday that it has sold its equity interest in Tata Motors, and through this sale of its shares, the company will receive a cash inflow of roughly 300 million Euro.

Daimler's 5.34 percent of the ordinary shares of the Indian auto company were bought by various groups of investors via the capital market.

Tata Motors' share price has risen significantly lately, particularly in 2009, allowing for Daimler to receive such a "substantial" cash inflow from this sale. In fact, officials said the sale will positively impact Daimler's EBIT by approximately 265 million Euro. Officials said the transaction will be accounted for in the first quarter of 2010.

"Daimler is today in an excellent position to capitalize on the growth potential of the Indian passenger and commercial vehicle markets and continues to intensify its own activities there," Daimler officials noted.

"An equity participation of Daimler in Tata is therefore no longer necessary," they added. "This has been done in full consultation with Tata. Relations between the two companies are excellent and will not be adversely affected by this sale."

Indian Market's Growth Potential

Although the world is mired in a financial crisis, there has been burgeoning growth in the Indian economy, officials explained. Along with this growth there have been significant social developments as well as "corresponding need to catch up for the country's automotive industry."

In light of these growth opportunities, Daimler said it has been bolstering its passenger car and commercial vehicle operations in India.

For example, Daimler said its Mercedes-Benz business is "firmly established" there, as the Mercedes-Benz Indian wholly owned subsidiary has been building cars and commercial vehicles in Pune for the last 15 years and just opened a new plant there in February 2009 to produce E-Class and S-Class vehicles.

Furthermore, there are there 25 cities throughout the nation that have Mercedes-Benz showrooms and service centers.

"The brand with the star started successfully into 2010 in India. In the first two months, Mercedes-Benz almost doubled its sales to a total of 800 vehicles. Additional positive impetus is expected this year from the launch of the new E-Class," officials stated.

This year, Mercedes-Benz expects to increase its market share and "grow at a double-digit rate."

In 2009, Mercedes-Benz delivered 3,200 units in the country.

Meanwhile, on the Daimler Trucks side, India is considered "one of the key markets of the future."

This is due to the projected increase in demand in the BRIC countries (Brazil, Russia, India and China) for commercial vehicles.

Also, at the start of this year, Daimler India Commercial Vehicles Ltd. — a production company Daimler Trucks founded in 2009 — assumed marketing of the Fuso branded commercial vehicles, and an Indian customer bought the first of these Fuso vehicles in January.

"For Daimler Trucks, India is not only a fast-growing market, but also the key to a completely new generation of products," officials noted.

DICV will be opening a new plant in Chennai, which is in the southeast of India.

"Starting in 2012, the new plant will initially produce light, medium and heavy-duty commercial vehicles for the Indian volume market under a new brand name," executives pointed out. "The production of trucks for export to other emerging markets will follow at a later date."

Officials added that besides its car and commercial vehicle activities in the country, Daimler also opened a research and development center in Bangalore in 1996, which is the largest of these outside of Germany.