EXCLUSIVE STORY: A relationship that started somewhere in 1997 with
Mercedes-Benz India has strengthened and grown significantly for Pune based
Force Motors with the latter informing
the Bombay Stock Exchange in February 2015 that it would be setting up a new
factory for engines and gearboxes in Chakan region of Pune in Maharashtra.
Force Motors had announced that the new plant is being set
up in Chakan for “manufacture of motor vehicles parts like engines, gearboxes,
axles and others with annual capacity of 50,000 sets per annum”. The company
has now confirmed to Motown India that this new facility
which is being built in Chakan is a “dedicated facility for Mercedes Benz India
Ltd”. A spokesperson for the company informed that the company will be
investing Rs 100 crore in the new facility.
Currently, Mercedes-Benz engines and axles are assembled at
a dedicated place within the Force Motor’s existing Chakan plant. This part of
the plant runs under the strict supervision of Mercedes-Benz engineers, several
of them from Germany.
An email query sent to Mercedes-Benz India remained
unanswered.
Meanwhile, this new development comes at a time when another
luxury car maker BMW India had announced
recently that it had partnered with major Indian auto component
suppliers for sourcing of components for local production of its cars at BMW
Plant Chennai. Among the suppliers is Force Motors for engines and gear boxes
for the BMW cars to be made/ assembled here in India.
The factory has already started initial activity, which will
be ramped up over the next quarter, the company informed.
“Presently the products being manufactured at this factory
are for supply to BMW India Private Limited, under a supply agreement. This
supply is on Principal to Principal basis," Force Motors noted.
Apparently, Force Motors had invested around Rs 100 crore in
the plant, with BMW India investing about Rs 200 crore in the plant in Chennai.
In an interview with this correspondent in 2014, Prasan
Firodia, Managing Director of Force Motors had talked highly of his company’s
association with Mercedes-Benz India as well as the proposed tie up with BMW
India (the plant is now operational since January 2015).
“We started in 1997, we have now done close to 50,000
engines. After a few years we added axles. The portfolio increased from engines
to axles. Now I am doing C, E, S, M, GL and soon I will be doing the CLA and
the GLA in terms of engines and axles.
The business has only grown. We have a very good relationship with Daimler. Hundred percent of all Mercedes cars built in
India which are CKD have engines and axles going from us,” Firodia had
mentioned.
“Similarly, based on our performance and consistency, we won
a contract with BMW. We have a dedicated plant coming up in Chennai. This plant
will be live in January 2015. All engines for BMW, right from the X1, X3, X5 to
the Q 3,5,7 and the Mini vehicle, all ranges will be going from us. We will be
the only company globally who will be supplying engines to both BMW and
Mercedes-Benz. In case of BMW it is even more unique because this is the first
time in the BMW universe where somebody else is going to assemble and test
their engines. This does not happen anywhere today. We are putting in around Rs
100 crore in the plant, BMW is putting
in around Rs 200 crore. We got the contract in March 2014,”Firodia had
mentioned at that point of time.
Incidentally, for the last 35 years Force Motors has been
assembling and locally building Mercedes engines for its own use. Firodia was
of the opinion that the company is exposed to German engineering to some
extent. “We have been doing work for Mercedes since 1997. The way we have
performed, our business has only increased with Daimler. That’s a big
achievement. BMW also respects this.
They too need reliable partners. As for the capacity, whatever BMW makes, 100pc
of that will be built at the plant,” Firoida had mentioned.
In another involvement related to equity shares of Force
Motors, the company recently informed the Bombay Stock Exchange that the
Promoters of the Company, viz. Jaya Hind Investments Private Limited, have
acquired 1,00,200 equity shares of Rs. 10 each (in demat form) from the Market
on March 13, 2015. With this acquisition, the number of shares held by the
Promoter Group stands increased from 78,21,295 equity shares to 79,21,495
equity shares, i.e from 59.36% to 60.12% of the total Paid Up Share Capital of
the Company. The company’s share price touched a 52 week high of Rs 1791 per
share in April 2015. Barely a year back, this share had touched a 52-week low
at Rs 342.85 per share.