A string of poor sales performances and differences over strategy between the joint venture partners has led Force Motors to sell stake worth over Rs 1,000 crore in its 50:50 commercial vehicle joint venture to German truck major MAN AG. Post stake sale, Force Motors will have an inconsequential stake of less than 5% in the joint venture company MAN Force Trucks (MFTPL). And this is the second instance when MAN has decided to raise its stake in the JV — in 2008, MAN had increased its shareholding to 50% from 30%.
Force Motors will sell and transfer 55.8 million equity shares of MFTPL to its partner MAN, subject to approvals. Both Force Motors and MAN will continue to cooperate with each other, and with MFTPL, based on the new contractual arrangement. Despite being one of the earliest entrants in the market, the joint venture never really took off over the past five years due to premium pricing. MAN Force Trucks merely managed annual sales of 3,000 to 4,000 units over the past couple of years which does not even make up 1% market share of the fast-growing commercial vehicle space.
MAN Force has a manufacturing facility at Pithampur with a capacity of 24,000 units per annum and the JV sold trucks ranging from 16 tonnes to 49 tonnes. MAN Force had plans to export significantly to overseas markets like Sri Lanka, Indonesia and certain African nations. Almost one-third of the production was set aside for exports, yet the JV did not even achieve 25-30% of the targeted volumes.
| Company Name | CMP |
|---|---|
| Tata Motors | 952.40 |
| Ashok Leyland | 210.95 |
| Force Motors | 8635.00 |
| Olectra Greentech | 1714.00 |
| Tata Motors - DVR | 643.10 |
| View more.. | |
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