It’S curtains for German heavy commercial vehicle maker MAN Trucks of Volkswagen group after struggling for 15 years to make a mark in the world’s fourth largest automobile market.
But Europe’s leading truck maker is ensuring that 400 employees at its Pithampur factory in Madhya Pradesh are retained by the buyer.
Force Motors, the Pune-headquartered commercial vehicle maker, on Thursday said that it has agreed to acquire the manufacturing plant of MAN Trucks for an undisclosed amount. The actual sale would be completed by the end of October, Abhay Firodia, chairman at Force Motors said.
Earlier in August, Volkswagen Group-owned MAN Truck & Bus decided to exit from Indian market to increase its focus on the premium segments of the global markets and had put its assets including the plant up for sale.
The heavy duty commercial vehicles segment in India is dominated by Tata Motors and Ashok Leyland, which command more than 70 per cent of the market share. Volvo Eicher Commercial Vehicles is the third biggest while Daimler Commercial Vehicles is growing in the premier segment.
In a regulatory filing, Force said its board has accepted a proposal from MAN Trucks India to sell and transfer certain assets including immovable and movable properties as also other intangible assets at its plant. The arrangement is being recorded by binding agreements.
“MAN Trucks India and Force Motors have entered into an agreement wherein Force Motors will acquire the Pithampur manufacturing facility of MAN,” the official spokesperson for MAN Trucks India told Financial Chronicle. He said the agreement also entails continued employment for all MAN members at Pithampur. “This development is consequent to the announcement from MAN Trucks earlier in August to restructure its India operations,” the spokesperson said. The German firm had announced its intent to sell its manufacturing plant and to provide continuity of employment for its staff in Pithampur. “MAN Trucks India cannot divulge any details of the agreement, including commercials, with Force Motors,” he said.
MAN Trucks India would now become an R&D Centre for Excellence supporting global projects. The manufacturing, sales and exports of the CLA range of heavy commercial vehicles will be stopped after the existing customer orders are completed.