[DRPSREDDY]

FORCE Motors - Scenario post CAFE norms. Will they sustain?

Force Motors recently was in the news for the wrong reason, CAFE norms. Force Motors cars didn't comply with the recently introduced CAFE norms and was recommended by the committee to be fined Rs. Seventy lakhs for not complying with the latest emission norms. The company only has diesel engine powered vehicles in it's portfolio. Forgot about Electric or Hybrids, they don't even have a petrol engine. They only have Body on Ladder frame chassis and don't have any Monocoque chassis to introduce lighter and more fuel efficient vehicles. The company is ambitiously testing 4 new passenger vehicles, a 3-door, 5-door SUVs in two formats and a light truck displayed in the Indonesian Motor show. But all of them are with the same 2.6L Mercedes derived engine. They should have worked on the 2.2L, a relatively modern engine compared to the earlier one.







One major question strikes every one's mind who has some thoughts about Force Motors is, how will they sustain in the long term? They have not begun testing any alternative fuels like petrol, hybrid or electric platforms or and signs of launching them forget about that, they have not even displayed any till date. This surely drags them into the CAFE norms net and will face huge fines in the future that will bring them into financial pressure as they grow their portfolio. That leaves me puzzled about their seriousness in the automotive world and the future of the division of their company.

Force motors testing atleast four different GURKHA based SUVs

[diwakarmuthu]

Apart from manufacturing, Force pretty much lacks in all other departments especially Design, marketing, service, compliance, PR, etc. They may cough up the fine and continue to work on developing a new engine (which may take a long time in my view).

Alternatively, why can't they collaborate with Tata (2.2 Dicor used in Winger), Mahindra (2.2 mhawk that was made BSVI ready), Fiat or maybe even Ford (they continue to make engines from the Gujurat plant) and source a competent 2.0L or a 2.2L engine and focus on building the product.

In the past decade, I have not seen major investments from Force, so am not hopeful now as well.

[anjan_c2007]

Since it's inception in 1958 as Bajaj Tempo Motors Ltd (Tempo is a registered trademark of Daimler) the Firodia family's second and third generations are presently managing the company. The name was changed to Force Motors Ltd in 2005. It is evident that the company has synergy and is meeting the challenges the modern times and is moving ahead , full steam. Some facts about Force Motors from Wikipedia:-

In 2015, the company was awarded a contract by BMW, resulting in a new facility in Chennai which produces and test engines and transmissions exclusively for all BMW cars and SUVs made in India.This plant can produce up to 20,000 engines per year.The facility was completed in July 2015.

A new plant was inaugurated at Chakan, Pune in June 2016. This facility assembles and tests engines for all Mercedes Cars and SUVs made in India.The new plant has a current annual capacity of 20,000 engines and 20,000 front and rear axles.

In March 2018, Force Motors entered into a joint-venture agreement with Rolls-Royce Power Systems AG to manufacture the 10- and 12-cylinder Series 1600 engines (545 hp to 1050 hp) in India for worldwide supply. These engines are meant for power generation and under floor rail applications.

Like their bread and butter changed over from the Tempo Hanseat three wheeler (1958) ( known as Dukkar in M.P. and Chattisgarh) to the Matador (1969), the Trax since early 1990's till Tata Sumo's entry in 1995, the Traveller is now their mainstay that sustains the company. They have tractors and the UV's Trax, Judo, Toofan, Cruiser and Gurkha their pickup variants in the portfolio that are not best sellers.

However, being in the automobile business for 65 years, hopefully they will be well prepared to bail out the company and meet the contemporary regulatory needs. But as we have observed, Hindustan Motors Ltd were in business since 1942 and Premier Automobiles Ltd since around 1945 and both were also family owned. But they failed to change over with the new age competition and perished in 1999 and 2014 respectively.

Hence, let's hope that the Firodias sustain their decades old company and embrace newer regulatory initiatives for sustenance.

[DRPSREDDY]

Originally Posted by anjan_c2007

The name was changed to Force Motors Ltd in 2005. It is evident that the company has synergy and is meeting the challenges the modern times and is moving ahead, full steam.

Hence, let's hope that the Firodias sustain their decades old company and embrace newer regulatory initiatives for sustenance.

That all seems rosy on paper. Other verticals may be doing good. But it is the passenger automobile division of that shows no signs of metamorphosis. They still are toying around the same body, chassis and engine. Only new development is seen in the form of a new commercial van, code named T1N, later Christensen URBANIA. During the product display in 2020, they did mention a capex of 600 crores for development of 2 models on a Monocoque chassis for commercial segment along with electrification but still has not seen the light of the day. No information or anything about Trax or Gurkha or any new platform.

Force motors plans Rs.600cr capex to develop 2 new models

[Shreyans_Jain]

Private passenger vehicles were never really Force Motor’s thing. They were always in the transport and utility vehicles game, and they have always been good at it. We should not look at this company as a potential Tata Motors or Mahindra. Private passenger vehicles is a hugely competitive, complex and capital hungry business, and Force very well knows this. That is why they focus on only the select segments where there is minimum competition and they have synergies with their commercial centric products. And in these commercial segments, they rule the roost. Well accepted and hardy products which enjoy both customer loyalty and less competition. Private sales are added bonus and more about brand building. It is for good reason that Gurkha is widely considered the most hardcore of all off roaders in India, not Thar or Jimny or Fortuner or Endeavour.

If Mahindra runs on Scorpio and Bolero, if Honda runs on City, then Force Motors runs on Tempo Traveller. And unlike M&M or Honda, they enjoy an absolute monopoly. Traveller is essentially a synonym for passenger van in India nowadays. The new Urbania is a MASSIVE improvement in every possible way and is actually a passenger van worthy of today’s times. Is any other company lining up products to compete with that? Not really.

Overall, the company is financially healthy, profitable, competitive and well entrenched in its core segments and also has a diversified and well established ‘side business’ of assembling engines and powertrains for some of the biggest companies in the game.

[DRPSREDDY]

Originally Posted by Shreyans_Jain

Private passenger vehicles were never really Force Motor’s thing. They were always in the transport and utility vehicles game, and they have always been good at it. We should not look at this company as a potential Tata Motors or Mahindra. Private passenger vehicles is a hugely competitive, complex and capital hungry business, and Force very well knows this. That is why they focus on only the select segments where there is minimum competition and they have synergies with their commercial centric products. .

In the current automobile world, with all the emission norms getting strict and restrictions coming in, if they have to adapt, they have to do it with full compliance. They should shut the shop if they can't compete with Mahindra or TATA. It is a capital intensive world or they will eventually meet the fate of Premier automotive or Hindustan motors. They can't keep simply burning cash by paying huge fines. Even Mahindra is in the same select segment but is fast innovating.

Originally Posted by Shreyans_Jain

Overall, the company is financially healthy, profitable, competitive and well entrenched in its core segments and also has a diversified and well established ‘side business’ of assembling engines and powertrains for some of the biggest companies in the game.

Their main business is on the crossroads as of today and they will have to perish if they don't adapt to new emission norms and their 'Side business' will soon become their main business and will have to settle making spares and assembly of engines for top brands. They will need to invest to stay afloat.

[Shreyans_Jain]

Originally Posted by DRPSREDDY

In the current automobile world, with all the emission norms getting strict and restrictions coming in, if they have to adapt, they have to do it with full compliance.

Their main business is on the crossroads as of today and they will have to perish if they don't adapt to new emission norms and their 'Side business' will soon become their main business and will have to settle making spares and assembly of engines for top brands. They will need to invest to stay afloat.

They are fully compliant with all emission norms as applicable to the commercial market. Their CV business is going from strength to strength. Their share price has increased by 2.5 times in the past year. They cater to the Indian Army. Do we hear about emission compliance of Eicher or Ashok Leyland or Greaves? Force Motors is in that boat. Force’s PV business is minuscule, basically irrelevant in front of their CV business. People can write off this company at their own peril.

[anjan_c2007]

Originally Posted by Shreyans_Jain

Their share price has increased by 2.5 times in the past year. They cater to the Indian Army. Do we hear about emission compliance of Eicher or Ashok Leyland or Greaves? Force Motors is in that boat. Force’s PV business is minuscule, basically irrelevant in front of their CV business. People can write off this company at their own peril.

Yes, as your and my posts have affirmed, the Force Traveller has been their mainstay eversince it was introduced and had started rocking the sales charts in its category. In fact, upon visiting a showroom recently, a SA frankly admitted that the dealership sustains itself with its Traveller sales. Those PV's and their market penetrations doesn't give either Force Motors or its dealerships sleepless nights. Intrigued, the PV sales though could give sleepless nights to some individuals.

In fact, in any tourist destination one can just count the number of tens of Force Travellers, forcing their paths to such locations.

[Kosfactor]

Originally Posted by DRPSREDDY

Their main business is on the crossroads as of today and they will have to perish if they don't adapt to new emission norms and their 'Side business' will soon become their main business and will have to settle making spares and assembly of engines for top brands. They will need to invest to stay afloat.

Bigger players like Tata as well as Maruti has not invested in decent powertain and have to rely on others, so force motors developing competitive powertrain and then making money selling cars to the Indian car buyer profitably is difficult to imagine.

[DRPSREDDY]

Originally Posted by Kosfactor

Bigger players like Tata as well as Maruti has not invested in decent powertain and have to rely on others, so force motors developing competitive powertrain and then making money selling cars to the Indian car buyer profitably is difficult to imagine.

Exactly my point. They have been able to source powertrains and technology, but Force Motors has not shown any signs of launching alternative fuel vehicles. Especially the PV segment. They will have to buck up or face paying huge fines as per CAFE norms.

Modern day technology is at crossroads. With uncertainty of which of the technologies will survive, they will have to pick a way or they will fall behind. If they have to live on, they will need to make a choice of powertrains. Even Mahindra has no electric powertrain technology and is relying on Volkswagen. Force too needs to decide if they want to continue or shut shop.

[itwasntme]

Little known fact is that Force Motors manufactures engines for BMW, Mercedes & Rolls Royce!

That is a testament to their engineering capabilities; I guess the retail market is simply not a very high priority for them.

[diwakarmuthu]

Originally Posted by anjan_c2007

Since it's inception in 1958 as Bajaj Tempo Motors Ltd (Tempo is a registered trademark of Daimler) the Firodia family's second and third generations are presently managing the company. The name was changed to Force Motors Ltd in 2005. It is evident that the company has synergy and is meeting the challenges the modern times and is moving ahead , full steam. Some facts about Force Motors from Wikipedia:-

This is interesting. My understanding was the BMW JV was exclusive with no tech transfer. If they can leverage the engineering expertise to build new generation engines, then it would be a great win for Force.

[GTO]

Originally Posted by itwasntme

Little known fact is that Force Motors manufactures engines for BMW, Mercedes & Rolls Royce!

That is a testament to their engineering capabilities

Not engineering, buddy. "Assembly" capabilities. The engines are engineered in Germany.

Force Motors is very small and will find the car production journey very difficult. Possibilities in the longer term:

- Import EV drivetrains from China (like so many others) and launch EVs. EV batteries, controllers & motors are available to anyone willing to write a cheque.

- Big partnership, stake sale or acquisition by another company.

- Drop car making. Continue with just commercial vehicle segment & assemblies for others.

[DRPSREDDY]

Originally Posted by Shreyans_Jain

They are fully compliant with all emission norms as applicable to the commercial market. Their CV business is going from strength to strength. Their share price has increased by 2.5 times in the past year. They cater to the Indian Army. Do we hear about emission compliance of Eicher or Ashok Leyland or Greaves? Force Motors is in that boat. Force’s PV business is minuscule, basically irrelevant in front of their CV business. People can write off this company at their own peril.

Agreed that their CV business is strong and staying healthy and robust. All the other companies you mentioned have already launched their electric and alternative fuel buses and trucks but Force is no where.

This issue here is about the PV segment. It's cousin Mercedes has displayed the Electric G class (from where the Force Trax/Gurkha platform is derived) and videos from MB are making rounds.

Mercedes Benz G Wagon Electric

Originally Posted by anjan_c2007

Yes, as your and my posts have affirmed, the Force Traveller has been their mainstay eversince it was introduced and had started rocking the sales charts in its category. In fact, upon visiting a showroom recently, a SA frankly admitted that the dealership sustains itself with its Traveller sales.

But TATA has thrown in a spanner in the form of Winger. This product from TATA is growing healthy. They ate away more than half of the ambulance sales. It is selling more than Traveller on total sales but Force is 'growing' at a good pace. Their Macropolo buses are eating into higher end.

[Joli]

Originally Posted by DRPSREDDY

FORCE Motors - Scenario post CAFE norms. Will they sustain?

Force Motors recently was in the news for the wrong reason, CAFE norms. Force Motors cars didn't comply with the recently introduced CAFE norms and was recommended by the committee to be fined Rs. Seventy lakhs for not complying with the latest emission norms. The company only has diesel engine powered vehicles in it's portfolio. Forgot about Electric or Hybrids, they don't even have a petrol engine. They only have Body on Ladder frame chassis and don't have any Monocoque chassis to introduce lighter and more fuel efficient vehicles. The company is ambitiously testing 4 new passenger vehicles, a 3-door, 5-door SUVs in two formats and a light truck displayed in the Indonesian Motor show. But all of them are with the same 2.6L Mercedes derived engine. They should have worked on the 2.2L, a relatively modern engine compared to the earlier one.

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Force did showcase the T1N electric platform

https://www.youtube.com/watch?v=QfmyF0ytHXg

What happened to it is anyone's guess, though the Urbania based on the same platform but with a diesel engine is now on sale. As the others have pointed out, it excels in commercial vehicles as well as engine assembly for Mercedes-Benz, BMW and Rolls-Royce Power Systems (generator sets, if I am not wrong) from the Chennai plant.