MAN India has a team of 400 employees at the plant, including shopfloor and administration, and the agreement ensures continuity of employment, MAN stated.
Force Motors is acquiring the Pithampur plant of German truck maker MAN Truck & Bus’s (MTB) Indian subsidiary, Man Trucks India. MAN Trucks India has not divulged any details of the agreement, including commercials. MTB has already announced an exit from the India market and will stop manufacturing, sales and exports of the CLA range after the existing customer orders are completed. Force Motors has said they expect to close the deal by October 2018.
Force Motors MD Prasan Firodia said the Pithampur plant was their own initiative as they developed the plant. The asset has now come back to them, Firodia said. He indicated at retaining the capacity at the plant. Force Motors has its own facility at the same location, where it makes the Traveller, an LCV. In the preceding financial year, Force had sold 31,022 units.
According to the agreement, Force Motors will acquire certain assets at the Pithampur manufacturing facility of MAN, including movable and immovable property.
“The agreement also entails continued employment for all MAN members at Pithampur,” a MAN India spokesperson said. The company has a team of 400 employees at the plant, including shopfloor and administration, and the agreement ensures continuity of employment, MAN stated.
The Force Motors and MAN Trucks relationship in India goes back to 2003, when the latter entered India through a collaboration with the former to make heavy commercial vehicles. They then upgraded this collaboration to a 50:50 JV in 2006. But differences in opinion about strategy for India and low volumes led to them parting ways in the loss-making JV in 2012. MAN bought out the stake of Force Motors in the venture for around `1,000 crore and made it a 100% subsidiary of Germany’s MAN.
After a lacklustre performance in the Indian market, MAN decided to exit from India. While the corporate office, marketing and sales team is being offered a golden handshake, the R&D is being retained by MAN for supporting its global operations.