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
How much do you engine assembly and axles businesses contribute to your
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.
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