The manufacturer of vans and utility vehicles has hired E&Y to assist with business restructuring and the digital transformation of its entire value chain. As part of its strategic shift to concentrate on its key areas—utility vehicles and commercial passenger carriers—the OEM has decided to discontinue its tractor division.
The past financial year marked a historic high for Force Motors, achieving unprecedented levels in both revenue and profit. The company reported revenues of INR 5,000 crore and a net profit of INR 152 crore. However, the preceding two years were exceptionally challenging for the company and its Managing Director Prasan Firodia, largely due to the impacts of the Coronavirus pandemic, which saw the company’s capacity utilization halve to about 35%.
Force Motors is also making strides in the electric vehicle market with its Traveller EV and has started a cautious rollout after obtaining the necessary homologation certificate. Concurrently, Force Motors is maintaining its commitment to the 4X4 SUV market, as evidenced by its continued production of Gurkha.
During this difficult period, Force Motors engaged Ernst & Young to lead a significant cost optimisation initiative, which included shutting down its 30-year-old agriculture tractor division to concentrate resources on enhancing its core shared mobility and passenger transport solutions. This strategic shift emphasizes products like the Traveller platform, mono buses, and utility vehicles.
Further advancing its global strategy, Force Motors has inaugurated its first assembly line outside of India in Kenya and plans another facility in Africa to better access local markets and benefit from tax advantages. The company also aims to expand its footprint in the Middle East and Latin America, having already exported around 35 units of its Urbania van brand to these regions. Despite the nascent stage of the premium van segment in India, where the Urbania was launched domestically about eighteen months ago and has sold over 3,000 units, Firodia is optimistic about growing demand and market creation for such vehicles.
The company’s operational strategies are further supported by a strong human capital development program in partnership with leading management institutes and an ongoing digital transformation across its value chain. Despite the exceptional performance last fiscal year, Firodia projects a more modest growth target of 10-15% in the current year, following two years of financial losses before FY24.
