Force Motors to Stop Tractor Unit Operations From March 31: Prioritizing Core Segments

Key Highlights

• Force Motors shuts down tractor unit from March 31.
• Decision part of product rationalization strategy.
• Focus shifts to core segments.
• Tractor sales facing severe pressure.
• Company to concentrate on Shared Mobility, Last Mile Mobility, luxury OEMs, and defense applications.

Pune-based Force Motors announced on Friday its decision to halt operations of its agricultural tractors business and related activities by March 31. This move is part of the company's strategy to streamline its product offerings and concentrate on its core segments.

Shift in Focus

Force Motors stated that it will now concentrate mainly on its core segments, including Shared Mobility Transportation, Last Mile Mobility, goods, and transportation, manufacturing of High Technology Critical Aggregates for Premium Luxury OEMs, and creation of Special Vehicles for Civil and Defence applications. As a result, the decision has been made to exit the Tractor Business from the company's product portfolio.

Also Read: Guru Randhawa's Tractor Trip Through Punjab: Echoes 'Mera Pind, Mere Khet' Sentiment

Financial Insights

According to an exchange filing by Force Motors, the sale of agricultural tractors contributed Rs 182.53 crore to the company's total revenue for the financial year ended March 31, 2023, accounting for 3.66% of the total revenue. The netblock of assets for the tractor unit was recorded at Rs 12.29 crore as of March 31, 2023.

Company Profile

Force Motors, recognized for its multi-seater passenger vehicles and Gurkha SUV, also manufactures engines for luxury carmakers such as BMW and Mercedes in India. The company's FY23 annual report reveals that around 48% of its revenue comes from vehicle sales, while approximately 36% of revenue is generated from contract engine manufacturing.

Challenging Market Dynamics

The decision to cease the tractor business operations coincides with a period of significant pressure on tractor sales. Mahindra and Mahindra, India’s largest tractor maker, recently revised its forecast for domestic tractor sales for FY24 due to economic challenges in rural areas. Force Motor’s move to focus on its core segments reflects its adaptability to changing market dynamics and strategic repositioning in response to evolving consumer needs.

Also Read: ICAR-CCRI Teams Up with Mahadhan Agritech Limited

CMV360 Says

Force Motor’s decision to discontinue its tractor unit operations reflects a strategic shift towards core segments amidst challenging market conditions. With a focus on efficiency and profitability, the company aims to navigate through the evolving landscape while maintaining its commitment to meeting customer demands and driving sustainable growth.