Interview with Prasan Firodia

Managing Director, Force Motors Ltd

Date: 22 Jun 2016 | Author: P.Tharyan
Prasan Firodia

You have inaugurated a new facility in Chakan (Pune) to manufacture engines and axles for Mercedes-Benz cars. Where was your facility earlier? Tell us about this new facility.

We used to assemble engines and axles for Mercedes Benz cars from Urse. That facility is closed.  This has been built with new processes and larger capacities. Capacity installed is one thing, but it has been built for another level. We have an installed capacity of 20,000 units per annum. At Urse it was just about 5000 to 6000 per annum. In the last three years the luxury car market has picked up on volumes. Based on that, a request came in for a larger set up. We have now built it from a ten year perspective more or less. We have an engine assembly plant for BMW in Chennai with similar capacity. These are all installed capacity.

At the Chakan plant we have eight engine assembly lines already building 14 engine variants. We can only do localisation once we have certain amount of volumes.  We need to have certain economies of scale to justify the complete redevelopment cycle in India. That is for the customer, in our case Mercedes-Benz, has to take a call as to when we can trigger a localisation programme.

How much do you engine assembly and axles businesses contribute to your overall revenues?

Our vertical in terms of aggregates business contributes around 30pc to 35pc to total revenues. The rest comes from our traditional commercial vehicle business.

Force Motors has invested Rs 100 crore in this plant. Has Mercedes-Benz also invested in this plant?

It is beyond what we have invested. They have also put in some money. This plant has been built with a capacity looking at the long run.

What is the installed capacity of Force Motors’ plant?

The installed capacity is around 65000 units per annum. Last year we have a growth in excess of 30pc. If monsoons are normal and the rural economy picks up, this year will also be a good year for us, at least a growth of 15 to 20pc over last year. During the Auto Expo this year, we launched several new variants of the Traveller, our flagship product. We have also started expanding out Traveller production capacity in Pithampur. We are averaging around 2000 Traveller vehicles a month.

Has the diesel ban (for diesel cars with engine capacities of 2000cc and above) in Delhi NCR and in Kerala impacted your business?

Definitely it has impacted our business. The luxury car segment which has a lot of engines which are more than 2000cc in capacity have been affected. Our assembly lines for engines are very flexible here in Chakan. You can make all eight lines petrol if you so desire. That has to come from the customer side, we are not the ones to decide. If they have an engine programme which is less than 2 litre, and they want to ramp it up, we can always do it.

How do you see the diesel ban by the Supreme Court and the NGT?

I hope the courts really do understand what the industry is saying and stop this irrational decision. Rather they should take a decision to stop plying old vehicles. That will really contribute to reducing pollution.

What about investments to move all your engines from Euro IV to Euro VI or Bharat Stage 6 emission levels by 2020?

Rs 100 crore will what we shall be investing to take our engines from Euro IV to Euro VI capability. The government has to also see if they can provide the fuel by April 2020. There is lot of cost involved for OEMs. 


Tags Force Motors plant Prasan Firodia Force Motors Tempo Traveller Mercedes plant Mercedes-Benz India engine plant BMW India engine plant Force Motors' Chakan plant


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Prasan Firodia
Date - 22 Jun 2016

Managing Director, Force Motors Ltd