Mahindra International Ltd is eyeing a stake in Eicher Motors Ltd, the Business Standard said on Friday, citing sources close to the development.
An alliance with Mahindra International — a venture of India's Mahindra & Mahindra Ltd and Navistar's International Truck and Engine Corp — would give Eicher expertise in engines and high-capacity trucks, it said.
A spokesman for Mahindra declined comment.
On Thursday, another newspaper had said Volvo was in advanced negotiations to buy a majority stake in Eicher, and that its offer of 675 rupees ($17) per share had topped an offer of 500 rupees a share from DaimlerChrysler.
A spokesman for Volvo on Friday said he would not comment on speculation, and reiterated the company's stated interest in a partnership with a local Indian firm.
Shares in Eicher Motors were up 0.2 percent at 500 rupees on Friday, valuing the company at $355 million. Its shares hit a lifetime high of 510 rupees on Thursday.
The owners hold about 59 percent in the maker of light trucks. Mitsubishi Motors has 3.6 percent.
Eicher said in July it planned to evaluate strategic partnerships. A statement from the company late on Thursday said it was still evaluating opportunities and was “in discussions with various potential partners.”
“We have not arrived at an understanding with any party,” the statement said.
Improving infrastructure and stricter emission and safety rules are fuelling a demand for trucks in India. The market is dominated by Tata Motors and Ashok Leyland.
Ashok Leyland is firming up a venture with Nissan Motor Co, while Force Motors has a venture with Germany's MAN AG.
Source: Reuters