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Force to enter passenger segment, launch SUVs in July

Force to enter passenger segment, launch SUVs in July
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First Published: Thu, Jun 23 2011. 02 57 PM IST
Updated: Thu, Jun 23 2011. 02 57 PM IST
Mumbai: Commercial vehicles maker Force Motors Ltd plans to foray into the passenger vehicle segment by launching sports utility vehicles (SUVs) under Force One brand in July, a top official said on Thursday.
The plan is to sell 4,000 SUVs in the first year of operations, managing director Prasan Firodia told reporters.
“Our core business remains commercial vehicles, that is our bread and butter. This is another vertical being created as the market is growing,” Firodia said.
He sees long term potential in the segment though economic factors are not showing very positive indications at present.
“Growth in the automotive industry is going to be tremendous. We are not looking at this segment for short-term gains,” Firodia said.
India’s auto sales in 2010 had grown at a breakneck pace of 30%, but are showing signs of a slowdown as consistently rising interest rates are forcing the middle class to tighten their purse strings.
Car sales rose 7% in May, their slowest pace in two years, while sales of commercial vehicles such as trucks and buses rose 16.16% from a year earlier.
Force Motors, known for its light commercial vehicles brand Tempo, Matador and Traveller, has already invested about Rs150 billion crore, over the last 12-18 months, in its plant to manufacture SUVs in Pithampur, Madhya Pradesh.
The plant has an installed capacity of 12,000 SUVs, which can be ramped up further, Firodia said.
The production for the vehicle will be 75-80% localised, while other materials like the interiors and sheet metal stampings will be imported.
In the short term, the company expects SUV sales to constitute 25-30% of the total, Firodia said without giving details.
For the fiscal year ended 31 March, the company posted a 55% jump in net sales to Rs1480 crore while its profit dipped marginally to Rs 58.62 crore.
At 1.52 p.m., shares of the company traded 0.01% lower at 682 rupees in a firm Mumbai market.
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First Published: Thu, Jun 23 2011. 02 57 PM IST
More Topics: Force Motors | SUV | Cars | Automakers | Force One |