Force Motors, the Pune-based maker of a range of commercial vehicles, will invest Rs 1,000 crore over the next two years to increase its manufacturing footprint and launch at least two vehicles including the ‘SUV Force One' due to be unveiled later this month.
The funds will be raised through a combination of internal resources and loan, and the company may also look at take the capital market route and propose a rights issue, Dr Abhay Firodia, Chairman, Force Group, told Business Line .
New plant
The company is at present in talks with the Madhya Pradesh Government for incentives to set up a new manufacturing plant for an all-new MPV due to be launched in late 2012. “We may set-up a new assembly line at our existing facility at Pithampur, or even consider going outside the state with a third plant. It all depends on the deal we get,” he said, adding that decision will be finalised over the next two months. The installed capacity of the new line will be 12,000 units per annum that can be expanded to 24,000 units.
Around two years ago, the company that was primarily into the manufacture of small and light commercial vehicles, decided to create a position in the personalised vehicle space. It set up a separate Passenger Vehicle Division and has spent the last one year and more on developing the new SUV.
“We will stick to SUVs and MPVs. We don't want to make sedans — of that we are clear at this stage,” Dr Firodia said.
Elaborating on the specifications for the new MPV, he said, “It will be like the Toyota Innova and the Renault Espace that created a new position in Europe when it was launched over 15 years ago.” He ruled out any collaboration for the purpose of manufacturing pointing out that the company had engineering capabilities to build a vehicle from scratch and will source technical know-how where it was needed.
Tractors
Force Motors is also looking at expanding its current range of tractors ranging from 25-60 HP that are made at its Akurdi plant. “We will add five to six new models, some smaller (15-20 HP) and some larger, (60-100 HP), ” Dr Firodia revealed, adding that part of the proposed Rs 1000 crore investment will go to scale up its tractor manufacturing capability from 4,000 units to 24,000 units per annum.