Force Motors to build new plant for Mercedes engines

Pune-based automaker Force Motors will set up a new plant at Chakan near here to make engines and axles for luxury carmaker Mercedes-Benz.

The company is already making these components for Mercedes at its existing plant in Akurdi near Pune. Once the new factory goes on stream by the end of 2015, the equipment will be moved there, Prasan Firodia, Managing Director, Force Motors, told BusinessLine .

The Force Motors Board accorded its approval for the new plant by a circular resolution on Saturday. The annual capacity will be of 50,000 sets a year.

The company already owns the 40-odd acres required for the plant, and is taking steps to convert the use and obtain necessary permissions for construction and establishment of the factory.

While industry experts estimate the financial outlay to be around ₹50 crore, Firodia declined to comment on it, indicating, however, that Mercedes will also invest in the project.

“We have been making engines and axles for Mercedes cars that are assembled in India for 18 years, and the new plant will cater to all their future requirements,” Firodia said. The installed capacity of 50,000 sets suggests that components to other original equipment manufacturers will also be supplied from here.

Mercedes currently sells around 10,000 cars a year in India, and builds five models – C-Class, E-Class, S-Class, GL-Class and the ML-Class at its Chakan plant. It has recently announced plans to build the compact sedan CLA-Class also locally.

The current localisation averages around 40 per cent across all its models.