Force Motors Announces Closure of Agricultural Tractor Business - SEBI Compliance Update

01 Apr, 2024

Force Motors Declares Closure of Agricultural Tractor Division Effective March 31, 2024

On March 29, 2024, Force Motor made headlines by announcing its exit from the Indian tractor market.  According to the company resources, Force Motors will stop manufacturing, dealing, and other associated activities of agricultural tractors from March 31, 2024, onwards in India.

The decision was taken during the meeting of the Board of Directors of the Company, organized on March 29, 2024.

Low Revenue Contribution and More Attention Towards Core Segment  Drives The Move

In this statement letter, Nikhil Deshpande, Force Company Secretary & Compliance Officer, stated that agricultural tractor sales were Rs.182.53 Crores and only contributed 3.66% to the company's total revenue for FY '24.

Currently, Force Motes is going through a product rationalization programme under which the main focus remains on the core segments of the organization. It wants to uplift and strengthen its operational verticals such as last mile mobility, manufacturing of high technology critical aggregates for premium luxury OEMs, goods and transportation, and manufacturing of special vehicles for civil and defence applications.

Due to this, the company’s key officials have decided to take an exit from the tractor business and remove agricultural tractors from its product portfolio.

Force Motors is best known for manufacturing high-end multi-seater passenger vehicles and Gurkha SUVs in India.

In addition, the company manufactures quality engines for premium cars like BMW and Mercedes. Vehicle sales remained a strength for Force Motors as this segment contributed 48% towards the company's total revenue in FY23. This decision of Force Motors is likely to impact the overall Indian tractor industry as the exit of a potential competitor always influences the sales of other players in the industry.