News: MAN seeks to strengthen India base

(TT 01/05/2006) Pithampur (MP) - The 7.4-billion euro MAN Nutzfahrzeuge Group, which has joined hands with Force Motors Ltd for manufacturing heavy trucks, wants a deeper relationship with India.

Not only is the German conglomerate in the process of forming another venture with Abhay Firodia of Force Motors (FML) to make buses, it is also looking at a host of activities that could emanate from India.

Encouraged by the way in which India has made its mark in the auto components sector, MAN group is looking at sourcing components from India to feed its facilities overseas.

Under the deal with Force Motors, 50 per cent of the trucks produced by the joint venture will be exported to markets in Asia, Africa and West Asia.

The MAN group is also in the process of setting up an engineering design centre (computer automated design) for its marine engine business that will come up at Aurangabad in Maharashtra. There is a strong possibility that a design centre based on similar lines catering to the automobile sector will be launched at a later stage, Hakan Samuelsson, chairman of the executive board of MAN AG said today.

Samuelsson was speaking on the occasion of MAN and Force Motors signing their joint venture for producing heavy trucks at the latter’s Pithampur plant in Madhya Pradesh.

The new joint venture, MAN Force Trucks Pvt Ltd, in which Force Motors will hold 70 per cent and the MAN group 30 per cent, comes with an investment of 150 million euro. The heavy trucks to be built under the joint venture are intended initially for the Indian market. From 2007, it will cater to the whole of Asia and Africa. In India, the vehicles will be sold by the joint venture while this function will be done overseas by the MAN sales organisation.

Abhay Firodia, chairman of Force Motors, told The Telegraph that the plant is due to roll out the first truck shortly and added that the vehicles sold from the unit will be at a slight premium vis-à-vis its competitors.

However, Firodia insisted that despite this, the company would offer a better value proposition in view of the leading edge technology that has come with the product. Moreover, the trucks made from the venture have been modified to suit the domestic conditions.

The Pithampur plant of Force Motors has a capacity to produce close to 24,000 vehicles annually. The vehicles to be exported will range from long-haul trucks and semi trailer tractors apart from tippers and special purpose vehicles.

At present, the joint venture imports a large part of its components. But by the end of this year, the local content in production and supplies from India will go up to over 90 per cent.

According to Force Motors, the high local content in production and procurement will make it possible to save up to 30 per cent of the material costs.