MUMBAI: Force Motors said on Tuesday that it has agreed to reduce the term of the licence granted by Germany?s ZF Friedrichshafen to make
gear boxes in India. The Pune-based auto major would be entitled to e8 mn in compensation for reducing the licence term.
?This is inspite of the efforts made by the company to absorb technology, develop processes and supplier base, indigenise parts of gear boxes and develop quality processes to manufacture gearboxes,? the company said in a statement to the BSE.
Force Motors had obtained two licences from ZF in 2004 to manufacture truck gearboxes for sale to original equipment manufactures (OEMs). Lately, ZF was keen to make gearboxes on its own in India for which they proposed to set up a plant. Consequently, Force Motors reduced the term of the licence for the planetary 9-speed gearbox to them. And ZF set up a manufacturing plant in India.
Currently, Force Motors (formerly Bajaj Tempo) has a 70:30 joint venture with German commercial major MAN Nutzfahrzeuge to produce trucks in the 16-49-tonne range with varying applications, from 40-tonne tractor trailers to 25-tonne tipper and rigid vehicles.
There were talks that the German CV maker was eyeing a majority stake in the JV, which was denied by Force Motors and MAN. ?The fact is that we are jointly planning to increase the share capital of the JV with both promoters subscribing,? a MAN spokesperson Nina Gutzeit said.
MAN Force Trucks was formed in November 2005, upgrading a two-year-old technical collaboration. The manufacturing facility is located in the Force Motors plant at Pithampur near Indore in Madhya Pradesh. The Rs 700-crore plant has the capacity to manufacture 24,000 trucks.
In April 2006, MAN and Force Motors signed an MoU to set up a bus venture with the same equity participation ? 70% with Force Motors and 30% with MAN?s bus division. This was to take MAN?s investments in India in the two JVs to close to e300 million. One of the reasons why nearly every truck and bus maker is interested in India is because of the growth of the CV market here and also the possibility to source locally and cut costs globally.
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