Pune-based Force Motors has said that it is closing its agricultural tractors business and related activities from March 31. The company has attributed the decision to its product-rationalisation programme, under which it will focus on its core segments.

“The company has, under its product-rationalisation 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 OEMs 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 has 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 per cent of its revenue from vehicle sales, while about 36 per cent 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  per cent 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.