Force Motors, Man to set up unit in MP

Pune-based Force Motors has entered into a joint venture with the Man Group of Germany to set up bus and truck manufacturing facilities in Madhya Pradesh entailing an investment of ¤300 million ($369 million). While ¤200 million would be spent for the truck facility, ¤100 million would be invested in the bus unit.

Force Motors and MAN would have an equity participation of 70:30 in both the projects. The plant was inaugurated by Union agriculture minister Sharad Pawar on Sunday at Pithampur near Indore.

Abhay Firodia, chairman and managing director, Force Motors and Wolfgang Fahrnberger, chairman of the management board of NEOMAN Bus Group, had signed a letter of intent for setting up a JV for manufacturing chassis, buses and coaches during the Indo-German Business Summit held at Hanover on April 24.

According to Firodia, the company would offer complete range of trucking solutions, right from long-haul trucks to tippers, tractor-trailers, multi-axle vehicles and special purpose vehicles like concrete mixing platforms and tankers. These vehicles would be manufactured at the new facility set up at Force Motors at Pithampur plant.

The vehicles would comply with Euro-III and Bharat Stage III emission norms and would have a built-in capability to be upgraded to Euro-IV norms.

The trucks manufactured at the new JV Company would be sold in India and exported to China, South East Asia, Australia, Africa and the Middle East through the MAN channel.

The JV would manufacture 24,000 trucks per year. 'We expect to export close to 10,000 trucks in the next few years. The value of the exports is likely to touch Rs 2,500 crore from the third year onwards,' Firodia said.

Force Motors is also looking at sourcing auto components from the leading Indian auto parts manufacturers to meet the requirement of the JV and for major MAN factories in Europe.

This would result in a potential export business of Rs 1,000 crore, which will be available to the Indian auto component industry, said Firodia. Auto part exports, which also included exports of castings and forging from the State of Madhya Pradesh, were only Rs 150 crore during the year 2005-06.

The JV aims at producing 4,000 vehicles annually, for Indian market at the end of 2007 and for the entire Asian market by 2008. Sudhir Mehta, MD, Force Motors, Pithampur, said that both these JVs are expected to give a boost to the industrial growth of the country in general and Pithampur (Madhya Pradesh) in particular.