Force Motors ties up with Rolls-Royce arm to make multi-purpose engines

Germany's MTU Friedrichshafen, an arm of Rolls-Royce Power Systems AG, on Tuesday inked a pact with India's Force Motors to set up a joint venture facility near Pune to produce MTU series engines, with an initial investment of over Rs300 crore.

Force Motors will hold 51 per cent equity in the JV and the remaining 49 per cent will be with MTU. The purpose is to set up a plant in India for the development, manufacture and marketing of engines, including engines for power generation, complete power generators and engines for various applications like rail, Force Motors said in a regulatory filing.

These multi-application engines are currently being produced at the Rolls-Royce Power Systems manufacturing facility in Germany. Besides, the joint venture will also build 1600 Series generators for the domestic and global markets.

"Each party will have equal rights to appoint directors. Capital contribution will continue in the ratio of the agreed proportion," the filing said.

The facility will come up near Force Motors' existing plant, is expected to start production by the end of next year, Force Motors managing director Prasan Firodia said while announcing the joint venture in New Delhi.

"This joint venture opens new opportunities for our series 1600 products ... once serial production capability for the 1600 engines have been established within the joint venture, we will have opportunities to add other applications, engines and power systems to the joint venture portfolio," president and chief executive of Rolls-Royce Power Systems, Andreas Schell, said.

The new company called Force MTU Power Systems will handle sales and service of 1600 series generators for end-users in India, Nepal and Sri Lanka, while Rolls-Royce Power Systems will handle sales and service for the rest of the global markets.

"This tie-up will open up numerous opportunities for growth and diversification. I see exciting times ahead since we are set to play a vital role in bringing to India and making in India cutting edge engines for multiple applications," Firodia said.

Force Motors mainly makes commercial, utility and agricultural vehicles. MTU is one of the leading manufacturers of large diesel engines, propulsion and drive systems for heavy applications such as in rail, land, and defence vehicles along with marine applications.

The Force Motors counter was trading at Rs2,803.95 per scrip, up 0.76 per cent, on the BSE at 2.30 pm.