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Force Motors opens engine plant for Mercedes

Hrishikesh Joshi / Mumbai 23 Jun 16 | 12:35 AM

Force Motors

Pune-based Force Motors on Wednesday inaugurated its Rs 100 crore greenfield plant for supplying engines and axle to Mercedes-Benz, India's biggest luxury carmaker. The new plant has a current annual capacity of 20,000 engines and 20,000 front and rear axle, which can be enhanced according to requirements.

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Mercedes has been buying engines for its cars and sports utility vehicles from Force since 1997. Till date, the latter has supplied around 60,000 engines and 50,000 axles.

“The inauguration of this plant marks a significant step in our 45-year-long association with Mercedes-Benz," said Prasan Firodia, managing director, Force Motors.

The company, which plans to invest another Rs 100 crore to prepare for upgrading to stricter emission norm of Bharat Stage VI by 2020, will supply exclusively to Mercedes from the plant. India will go straight from BS-IV to BS-VI norms by 2020.

When asked about the impact of the ban on diesel engines of 2000cc capacity or more in Delhi-NCR, Prasan said, “I wont be able to say how much we are impacted, but as these luxury carmakers are impacted we have also taken a hit."

On the ban, Abhay Firodia, chairman, Force Motors said, “We have to remove this artificial ban and we have to ensure that old polluting vehicles are taken off the road."

The company expects to triple its revenue to Rs 3,000 crore in next three years, driven by its contract manufacturing business for leading automobile companies like Mercedes and BMW. Currently, the revenue generated (from OEMs business) is around Rs 1,000 crore.

Firodia did not disclose the localisation percentage for the engine manufacturing for BMW and Mercedes.

The plant is spread over 130,000 sq ft with eight lines that produce and test up to 14 engine variants. This includes 4-cylinder gasoline and diesel engines, 6-cylinder V-type gasoline and diesel engines.

This is part of the Rs 700 crore pledged by Force Motors over the next two years.

Force Motors recently set up a new engine manufacturing facility near Chennai for BMW cars with an investment of Rs 200 crore, and it can produce around 20,000 premium engines a year. Force operates its business under three verticals – vehicle manufacturing, component manufacturing and tooling for other original equipment makers.

The vehicle business contributes 70 per cent. Its Tempo Traveller, a multipurpose utility vehicle, has a significant share of 67 per cent in this business.

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