Daimler AG, the maker of Mercedes-Benz cars, has received approval from the Reserve Bank of India to setup a non-banking finance company for its financial services business in India, the company said in a statement.

The newly founded Indian company, Daimler Financial Services India Pvt Ltd, will be a 100% subsidiary of Daimler AG and is expected to be operational in the third quarter of 2011. The company will initially invest upwards of $50 million as part of the market entry, the company said.

The product range will include financing, leasing, insurance and dealer financing for Mercedes-Benz passenger cars at market launch. The commercial vehicle finance products will be offered for the newly developed Daimler truck brand for the Indian market, BharatBenz, in 2012 after the start of truck production in Oragadam, close to Chennai, the release said.

“Every second passenger car and every fourth commercial vehicle from Daimler is financed or leased by us. India is one of the fastest growing automotive markets and Daimler Group has high expectations from this market,” said Richard Howard, Member of the Board of Management of Daimler Financial Services AG responsible for the region Africa & Asia/Pacific.

“Daimler Financial Services India will support the sales of Mercedes-Benz cars and Daimler trucks as we see a large demand for financing solutions in the market," he added.

Daimler Financial Services AG has shown strong growth in the three other “BRIC markets, the statement said, adding in Russia the business increased by 25 per cent compared to the year before, in Brazil the increase was at 35 per cent and in China at 100 per cent.

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