Force Motors sets ₹2,000 Cr capex plan for global expansion and defence growth

Force Motors, known for its shared mobility solutions, is gearing up to expand its presence in global markets and defence segment having consolidated its position in India by narrowing down on focus areas for profitable growth, according to Managing Director Prasan Firodia.

The Pune-based automaker, which has been debt free for two quarters now, has earmarked about ₹2,000 crore capex for three years to bolster digitisation, modernise and enhance production facilities, enhance sales infrastructure and roll out electric products.

In an interaction with PTI, Firodia stated that the company remains focussed on its core business of catering to shared mobility solutions with range of light commercial vehicles and multi utility vehicles -- Traveller and Urbania platforms among others, for sectors like education, health, tourism.

Besides, the company is eyeing aggressive growth in the defence segment, he added.

"We are now sitting in excess of 70 per cent market share in the Traveller segment. All these platforms , Monobus or Traveller or Urbania, these segments are growing for us. They have contributed handsomely for us, both in terms of top line revenue in the domestic market, and also in terms of generating very strong bottom line numbers," Firodia said.

"So now having got the position of being India's largest player, our aspiration is now to leverage our core, which is predominantly shared mobility solutions, and get into an international play," he added.

The company, which is exporting to around 20 countries mainly in the Gulf region, is now eyeing more markets in Latin America and Africa to fuel its next phase of growth.

"With Urbania and the Traveller we are now in a very calibrated and focused manner, getting into multiple international markets. We are now actually playing, as we speak, in almost in excess of 20 plus markets, and, this year we will add another five odd markets. We see a lot of opportunity in the international markets with these product platforms," Firodia said.

The product platforms are undergoing certain modifications, upgrades to qualify to the local, international market in terms of their legislative requirements or in terms of their homologation requirements, he added.

Firodia noted that currently, the revenue coming out of exports is small, but in terms of potential in the future, the export markets will offer the company similar quantum of opportunity in terms of numbers as the domestic market.

"Of course, that will not happen overnight, it will take time, clearly the ambition is to move in that direction, to say that at least 20-30 per cent of our volume should soon start coming out of export markets," Firodia said.

He noted that the company's board has approved ₹2,000 crore capex for next three years to be invested across the value chain with around ₹150 crore earmarked just for the digitisation initiative.

"Then, of course, we have multiple initiatives. There is capacity enhancement, there are product upgrades we will be coming out with. Traveller EV ambulance is ready. So there is investment happening across everything, building our network, upskilling and reskilling of our employees etc," Firodia stated.

When asked about the passenger vehicle segment, he noted that the company has no plans to expand in the vertical and is looking to enhance the play of its Gurkha SUV in defence sector and export markets.

"It's a hardcore off-roader and thus operates in a very niche segment and we have a very strong position. We are selling the light strike vehicle to the Indian forces, which is a special avatar of the Gurkha. We are also gunning for several other contracts for various applications with the armed forces, and it is going into export markets," Firodia said.

There is still a lot of potential for the company to leverage in these segments, he said.

"So, there is no point in digressing and getting defocussed and saying let's make a passenger car.. It is so tough to get success in the passenger car market in India," Firodia noted.

Sharing details on new product developments, he stated that Traveller Electric ambulance is ready and the work is going on the electric version of Urbania.

"The transition to EV in this segment is significantly low, but we will be ready with the product very shortly. So as soon as demand comes in we will be ready," he added.

Force Motors reported its highest ever second quarter profit at ₹350 crore, a twofold year-on-year increase. Revenue rose 8 per cent year-on-year to ₹2,106 crore in the July-September quarter.

Firodia said the company has narrowed down its focus, got rid of certain products, and exited certain markets, in its pursuit for sustained profitable growth.

"We did a deep dive to understand what is our core, and then decided to leverage our core. All these initiatives and then to improve efficiencies across the organisation, we did a lot of work on bringing our material cost under control over the last 3-4 years and that has started yielding results," he added.

The company operates five manufacturing units across India and employs over 10,000 people.

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