The Hindu Business Line : MAN bets on venture with Force for growth

MAN Nutzfahrzeuge, a 7.4-billion-euro Munich-based provider of commercial vehicles and transport solutions, is betting on its Indian joint venture with the Pune-based Force Motors to drive growth in the Asian, South African, South American, and South-East Asian markets in the first phase of operations.

The commercial vehicles heavyweight, which sold over 68,000 trucks in 2005-06, is now depending on MAN Force Trucks Pvt Ltd to speed up its journey towards the 100,000-truck mark by 2010, with the joint venture expected to export 12,000 trucks to various markets beginning the second quarter of the current year.

The group's bus division is also on the verge of signing a separate joint venture with Force Motors on April 24 to cater to the rising demand for buses in the same geographies as its trucking business, with the venture actually expected to be operational by 2007.

"Our joint venture in India with Force Motors will drive our growth in Asia and later to other comparable markets. We expect to make significant investments in the joint venture over the next few years," Mr Anton Weinmann, Chairman of the Executive Board of MAN Nutzfahrzeuge group, told visiting journalists from India.

Growth strategy

The truck major is focusing on the core European market which is on the upswing, and simultaneously targeting markets in Asia and Eastern Europe.

A 90-million-euro new truck assembly plant with 15,000 units annual capacity for its premium, over 16-tonne category of trucks is expected to go into production from mid-2007 in Poland, to cater to the increasing demand in Eastern Europe.

MAN Force Trucks, meanwhile, is a strategic move for the company, which will use the India operations to expand into comparable international markets and also as a sourcing hub for a range of components, including full aggregates, for which Force will be the facilitator.

"A purchasing office is currently being set up with Force Motors for sophisticated components at lower price lines and we want to relocate at least five per cent of our annual three-billion-euro purchases to India in the medium term," said Dr Karl Viktor Schaller, Senior Vice-President and Member of the Board of Business Unit, Heavy Trucks.

Joint venture

The joint venture's plant, which will be inaugurated on April 30, will manufacture and sell 24,000 units of trucks in the 16-49 tonnes category across a range of applications tailored specifically for the requirements of the Asian markets.

The 30:70 joint venture between MAN and Force will invest 150 million euros in the medium term for the truck business, which will achieve 100 per cent localisation by October.

The vehicles will be powered by MAN's D08 (4.6- and 6.9-litre) Euro III compliant engine. "But we are working on plans to increase the power range with an additional engine family, if the market develops a taste for higher powered vehicles," said Mr Karlheinz Meeh of Business Unit Engines.

"The joint venture will provide India and other comparable markets with products that feature MAN's latest technology in Europe but with made in India, lower price lines," said Mr Abhay Firodia, Chairman and Managing Director of Force Motors.

A special applications group is being set up at the joint venture's Pithampur manufacturing facilities to explore the various requirements of the market; the product portfolio will include a range of tippers, reefer vans, and tractor-trailers.

Joint venture officials said that discussions are also on with the Defence Ministry, which is replacing its older fleet with new generation vehicles, for the supply of specially built vehicles for the armed forces.

MAN is the company behind the erstwhile ShaktiMAN vehicles that the Indian Army used till the early 80s; it recently exhibited Hanuman, a new 6x6 gun tower at the auto and Defence expos.

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