[S2!!!]

Force Motors inaugurated its newest facility at Mahindra World City, Chennai. Set up at an investment of Rs. 200 crores, the company will manufacture and test diesel engines for BMW.

As a part of a contract manufacturing deal between BMW and Force Motors, the latter will locally manufacture 4 and 6-cylinder diesel engines for various BMW cars sold in India. Transmissions are produced and mated to the engines at this facility itself.

The plant was formally inaugurated by Anant Geete, Union Minister for Heavy Industries. Force has already supplied 3,000 units since January 2015. It has a capacity to manufacture 20,000 engines annually, which can be further increased to 50,000 units.

Earlier this year, BMW reported to have increased the levels of localization in India to 50%. As a result, the company recently announce revised prices of its cars (related article).

BMW is the second German car maker who utilizes Force Motors' service for engine assembly. The company has been assembling engines for Mercedes-Benz at its Pune plant.

[moralfibre]

Originally Posted by S2!!!

BMW is the second German car maker who utilizes Force Motors' service for engine assembly. The company has been assembling engines for Mercedes-Benz at its Pune plant.

Attachment 1394439

I wondered why Force Motors has never been able to cash on their long standing association (since 1997) with Mercedes Benz. Recently they also setup another plant in Chakan to supply engines as well as axles for Mercedes. I guess this line of business has proved to be more profitable than developing and building the Force One.

[sujithpnair]

Originally Posted by moralfibre

I wondered why Force Motors has never been able to cash on their long standing association (since 1997) with Mercedes Benz. Recently they also setup another plant in Chakan to supply engines as well as axles for Mercedes. I guess this line of business has proved to be more profitable than developing and building the Force One.

Ofcourse..!
Anyday reproduction and mass manufacturing is more profitable than developing from scratch. Also "chalega" attitude should be shed for strong R&D, hence DNA of said company has to be revamped right from root level.

[rajshenoy]

Great to see big players acknowledging the #MakeInIndia move. BMW had put up a full page ad ON TOI few days back.

I feel its great for automotive industry(just like entire manufacturing industry) there will be skilled labor force and in the short run ,more jobs and in the longer run, Entrepreneurs coming up with cutting edge products

Thanks to the manufacturing boom in china, now we are seeing many "good" chinese brands, Hopefully in another decade .. India can catch up

[Pratik Chavan]

Contract manufacturing will drive the automotive industry in future, since OEMs will essentially focus on R&D and marketing with actual production being outsourced to Contract Manufacturers. I see it going the consumer electronics ways.

[Sutripta]

Originally Posted by S2!!!

Force Motors inaugurated its newest facility at Mahindra World City, Chennai. Set up at an investment of Rs. 200 crores, the company will manufacture and test diesel engines for BMW.

Would like to know what 'manufacturing' means, ie what operations, what value additions.

Transmissions are produced and mated to the engines at this facility itself.

Transmissions manufactured too?!

It has a capacity to manufacture 20,000 engines annually, which can be further increased to 50,000 units.

What is BMWs yearly sales in India?

Regards
Sutripta

[Kumar R]

I wonder what sort of supervision / quality control / oversight these german luxury carmakers exercise in subcontracting out production of a critical component like an engine in this manner.

Somehow it is hard for me to reconcile this with the Force Gurkhas I see on my daily commute.

If I was looking out to purchase a Merc or a BMW this fact would do nothing to bolster my confidence.

[Make in India is a different issue altogether and on that yardstick this development is very much a success]

[Mad Max]

Originally Posted by Kumar R

I wonder what sort of supervision / quality control / oversight these german luxury carmakers exercise in subcontracting out production of a critical component like an engine in this manner.

Somehow it is hard for me to reconcile this with the Force Gurkhas I see on my daily commute.

I too thought the same until I thought about Fiat. Thy don't make universally appealing cars but their engines are a super hit. Maybe it's what some companies do. Better in ground production than fancy designs and all that jazz.

[moralfibre]

Originally Posted by Sutripta

Transmissions manufactured too?!

Regards
Sutripta

Transmissions are manufactured by ZF if I am not mistaken.

[Mr.Boss]

Originally Posted by Sutripta

What is BMWs yearly sales in India?

Around 10k vehicles annually (including Mini)
Excess (engine production) capacity may be utilized for exports in future.

[Rahul Rao]

Originally Posted by moralfibre

Transmissions are manufactured by ZF if I am not mistaken.

Yes Transmissions are made by ZF. Majority share holder in ZF India is Dinesh Munot and family, Brother in Law of Arun Firodiya whose father founded Force motors and Kinetic Engineering. Both families hold large no of shares in each others companies.

Rahul

[i74js]

Such kind of work in backdrop will help Force motors in longer run. The company is good at making engines and that is what they are doing now.

In developing countries like India, policies keep on changing the recent example of NGT coming heavily on diesel machines has resulted in tilting the balance between oil burners and petrol, whereas we have seen several manufacturers planning large investments in producing diesel engines in India in last one decade, barring Hyundai, which played smart and kept the engine manufacturing capabilities agile enough to produce diesel / petrol against demand

I see no harm in contract manufacturing of critical components (including engine and transmission) by their parties as there are ways and means to control quality which is in place when such arrangements are put to execution.

Force has been a trusted vendor for Merc for several decades and things have worked out for both; also we all have witnessed how Merc sales in India dropped during the last few years and I see better pricing coming out from increased localization by Merc

Contract production is very similar to contract farming the way PepsiCo is doing in several states of India wherein quality is monitored right from the seed selection to irrigating fields followed by selection of insecticides and pesticides and procurement of production.

All these are seamless and well integrated processes in supply-chain.

[Turbanator]

I don't think BMW / Force Motors engine plant will able to export engines any time soon . Most of the other plants like Fiat or Fiat Licensed Maruti plants are full fledged production units where engine blocks are cast and machined and so are many other components . Many parts in Engine assembly are always bought-out from speciality manufacturers .

What BMW must be doing here is kind of assembly - they must have many companies who are global suppliers having some setup in India for example Bosch , Schaeffler . So instead of placing orders to their German counterparts they must be getting these from their Indian warehouses , now these components can be either from overseas or Indian production depending on scales & manufacturing capabilities & total demand these vendors have . But for BMW India it will be termed as INR purchase . Going further this should actually prove good for MNC component manufacturer as this will encourage them to produce more locally then getting from overseas .

Remember CKD definitions were changed couple of years back and they had to pay hefty fine

http://www.team-bhp.com/forum/indian...otice-bmw.html

[S2!!!]

Originally Posted by Sutripta

Would like to know what 'manufacturing' means, ie what operations, what value additions.

In this case, it refers to assembly:

This plant located in Chengalpattu Taluk is the first independent plant outside of the BMW Group that assembles and tests engines for the German Luxury Car Maker. This project was started in June 2014 and was completed in a record time of seven months.

This plant is an important step in localization of high performance and premium quality engines for BMW India. A compact yet extremely modern facility with a high degree of attention to detail assures the highest quality and precise control on process parameters. The plant is completely air conditioned with high level of dust control to safeguard product quality.

Where essential, most modern technology is employed for ensuring assembly and joinery processes with computer controlled precision equipment.

Source: Press Release

Originally Posted by Sutripta

Transmissions manufactured too?!

Some of the major auto components sourced for local production of cars at BMW Plant Chennai are: engine and transmission from Force Motors, axles from ZF Hero Chassis, door panels and wiring harness from Draexlmaier India, exhaust systems from Tenneco Automotive India, heating, ventilating, air-conditioning and cooling modules from Valeo India and Mahle Behr and seats from Lear India.

Source: Team-BHP news article

Originally Posted by Sutripta

What is BMWs yearly sales in India?

BMW has an installed manufacturing (assembling) capacity of 14,000 units per annum, at its Chennai plant. The company has been shy of releasing its sales figures, ever since Mercedes and Audi overtook it to battle for the top spot.

[GTO]

Originally Posted by Kumar R

I wonder what sort of supervision / quality control / oversight these german luxury carmakers exercise in subcontracting out production of a critical component like an engine in this manner.

If I was looking out to purchase a Merc or a BMW this fact would do nothing to bolster my confidence.

My C220's engine was assembled by Force Motors. 100,000 kms = zero issues. The engine was top-class. Can't say the same about other components which failed & required premature replacement.

Originally Posted by Mr.Boss

Around 10k vehicles annually (including Mini)

Last year, BMW sold approximately 6,500 cars. That's way behind segment toppers, Mercedes & Audi who both did over 10,000 units.