NEW DELHI: Pune-based Force Motors on Friday said that it is closing its agricultural tractors business and related activities from March 31. The company attributed the decision to its product rationalisation programme under which it will focus on its core segments.
“The Company has, under its product rationalization programme, decided to focus mainly on its core segments such as Shared Mobility Transportation, Last Mile Mobility, goods and transportation, manufacturing of High Technology Critical Aggregates for Premium Luxury OEM’s and creation of Special Vehicles for Civil and Defence applications and a decision has been taken to exit the Tractor Business from the product portfolio of the Company,”
Force Motors said in an exchange filing. The company, known for its multi-seater passenger vehicles and Gurkha SUV, also makes engines for luxury carmakers such as BMW and Mercedes cars in India. According to FY23 annual report, Force earned about 48% of its revenue from vehicle sales while about 36% revenue comes from contract engine manufacturing.
Sale of agricultural tractors of the company accounted for total revenue of Rs 182.53 crore for the year ended March 31, 2023 (representing 3.66 % contribution to the Company’s total revenue for the financial year ended March 31, 2023) and the net block of the assets of the unit as at March 31, 2023 was Rs 12.29 crore.
The decision to shut down the tractor business comes at a time when tractor sales are under severe pressure. Mahindra and Mahindra, India’s largest tractor maker, last month cut its forecast for the domestic tractor sales for the industry for FY24 citing weakness in the rural economy.