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Force Motors opens Rs 100-cr plant for Mercedes

BS Reporters / Pune 22 Jun 16 | 06:22 PM

Pune-based Force Motors on Wednesday inaugurated its Rs 100 crore green field engine and axle manufacturing plant to be supplied to Mercedes-Benz, India's biggest luxury car maker.

The new plant has a current annual capacity of 20,000 engines and 20,000 front and rear axle, which can be further enhanced as per requirements. Mercedes has been buying engines from the Pune-based company since 1997 for its cars and sports utility vehicles. Till date, Force Motors has supplied over 60,000 engines and over 50,000 axles to Mercedes-Benz.

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"The inauguration of this plant marks a significant step in our 45-year-long association with Mercedes-Benz. This new plant will help Force Motors be more flexible in terms of the production capacity demands, said Prasan Firodia, managing director, Force Motors.

The company, which plans to invest another Rs 100 crore to prepare for up gradation to stricter emission norm of BS VI by 2020, will supply exclusively to Mercedes from the new plant. India will go straight from Euro-IV complaint petrol and diesel to Euro-VI fuel by 2020.

"We will invest around Rs 100 crore to move from Euro 4 to Euro 6 engines", said Firodia.

When asked about the impact of ban on over 2000cc and above engines in Delhi-NCR, Prasan said, "I wont be able to tell by how much we are impacted but as these luxury car makers are impacted we have also taken a hit."

Criticizing the diesel ban, Abhay Firodia, chairman, Force Motors said, "There are hurdles like ban on 2,000cc and above diesel engines. These are out of, I would say, lack of knowledge rather than out of knowledge on the part of people who decided to ban these."

"We have to remove this artificial ban and we have to ensure that the old polluting vehicles are taken off the road," he added.

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 Benz 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 1,30,000 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.

The investment is part of the Rs 700 crore investment pledged by Force Motors over the next two years, across its value chain for multiple products and business verticals.

Force Motors has recently set up a new engine manufacturing facility near Chennai for BMW cars with total investment at Rs 200 crore. It can produce up to 20,000 premium engines every year. Force operates its business under three verticals - vehicle manufacturing, component manufacturing and tooling for other original equipment makers.

The vehicle business contributes 70%. Its Tempo Traveller, a multipurpose utility vehicle, has a significant share of 67% in this business. In the past two years, production capacity has been taken from 700 units to 1,500 units a month, due to growing demand. 

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