Force Motors to foray into passenger vehicles

Force Motors said it will foray into the passenger vehicle segment with the launch of a multi-purpose vehicle by 2012, for which the company will set up a new facility in Madhya Pradesh with an initial capacity of 24,000 units per annum.

The company said it has signed a licencing agreement with German auto giant Daimler for procuring technology for the MPV, Force Motors said in a filing to the Bombay Stock Exchange (BSE).

"Force is engaged in a dialogue with the Madhya Pradesh government to locate a new plant for the production of the MPV at Pithampur. The production of this new product is expected to commence towards the end of calender year 2012 with an initial capacity of approximately 24,000 vehicles per annum," it added.

The company, however, did not mention how much investment the proposed plant is likely to incur.

Elaborating the licence agreement that was inked today, Force Motors said: "This comprehensive supply of product technology will facilitate the entry of Force into the passenger and goods vehicles segment, which is adjacent to its current product line of the 'Traveller' light commercial vehicle."

Force Motors currently uses a 2.2 litre common rail engine, the OM 611, in Traveller range of vehicles.

"Uprated versions of this engine are adapted for use in the SUV -- Force One -- being launched by Force Motors shortly. Similar variants will be adapted for installation in the new MPV, for which the above technology licence is being obtained," the filing said.

Force Motors currently has an association with MBtech Powertrain GmbH for sourcing technical assistance in regard to engine installation, vehicle build quality and electronic refinement among others.

"It is intended that the MPV, to be introduced under the new technical licence, will also receive support from MBtech," the company said.

Earlier, Daimler AG (then Daimler Benz AG) was a stakeholder in Force and had licenced to Force (then Bajaj Tempo Limited) the Traveller range of light commercial vehicles and OM 616 engine. Since 2001, Daimler no longer holds shares in Force.

Currently, Force Motors has a contract manufacturing agreement with Daimler for assembling engines and axles for luxury passenger cars of the German firm's subsidiary Mercedes Benz India.

Shares of Force Motors today closed 0.22% down at Rs 699 apiece on the BSE.