Eicher Motors Ltd.

Investor Presentation

In this Presentation
1 2

Eicher Motors Limited - Journey So far...
Eicher Motors Limited Overview

3
4

India’s Economic Growth and Opportunities for Commercial Vehicles
Volvo Eicher Commercial Vehicles Limited

Eicher Trucks & Buses


Volvo Trucks India

Eicher Engineering Components & Eicher Engineering Solutions  Heavy Duty Breakthrough  Medium Duty Engine Project 5 Royal Enfield

6

Financials

Investor Presentation

2

Eicher Motors Limited – Journey so far…

India’s first tractor rolls out of Eicher factory in Faridabad

Forms JV with AB

Royal Enfield
motorcycles acquired

Enters HD trucks segment

Volvo of Sweden;
transfers CV business to the JV

1959

1984
JV with Mitsubishi Motors to make ‘Canter’ trucks

1991

1993
JV with Mitsubishi ended, enters MD bus segment

2002

2005
Divests tractor and allied businesses to focus on CV and motorcycle businesses

2008

Investor Presentation

3

Eicher Motors Limited Overview India’s Economic Growth and Opportunities for Commercial Vehicles Volvo Eicher Commercial Vehicles Limited  3 4 Eicher Trucks & Buses   Volvo Trucks India Eicher Engineering Components & Eicher Engineering Solutions  Heavy Duty Breakthrough  Medium Duty Engine Project 5 Royal Enfield 6 Financials Investor Presentation 4 . 1 2 Eicher Motors Limited ....Journey So far..Moving forward.

Eicher Motors Limited Overview Retail Investors 13.4% Volvo A.B.6% EML 54. 8.3% Promoter Group 45.4% Volvo Eicher Commercial Vehicles Investor Presentation Royal Enfield 5 .5% 55.8% Institutional Investors 22.

full review with management  Strategic quarterly reviews and regular monthly operations review  Product board. that:  In-depth customer insights and market understanding  Best-in-class Capital Optimization:  Frugal engineering practices  Extensive knowledge of suppliers  Operational Excellence  Global Quality Standards Established Corporate Governance  Fully empowered management teams  Regular board meetings. Soft products board (aftermarket) held every quarter along with other statutory meetings Strong Values  Corporate conduct rooted in highest standards of ethics. every two months . Quality board.Eicher Management Philosophy Break-through Market Business Model  An evolved business model with 50+ years of experience in automotive space in India. integrity and transparency  Highly professional work ethic based on mutual respect  Very strong HR and IR culture and brand  Long-term orientation  Long history of institutionalized CSR and community activities Investor Presentation 6 . Customer Satisfaction board.

Established Governance Structure EML Board  S Sandilya: Non-executive Chairman  Siddhartha Lal: Managing Director & CEO  RL Ravichandran: Executive Director  Priya Brat: Independent Director  MJ Subbiah: Independent Director  Prateek Jalan: Independent Director VECV Board  Par Ostberg: Non-executive Chairman & Volvo nominated director  Bertil Thoren: Volvo nominated director  Joakim Hjerpe: Volvo nominated director  Siddhartha Lal: Managing Director & Eicher nominated director  Raul Rai: Eicher nominated director  Prateek Jalan: Eicher nominated director Investor Presentation 7 .

Moving forward. Eicher Motors Limited Overview 3 India’s economic growth and opportunities for Commercial Vehicles Volvo Eicher Commercial Vehicles Limited    4 Eicher Trucks & Buses Volvo Trucks India Eicher Engineering Components & Eicher Engineering Solutions  Heavy Duty Breakthrough  Medium Duty Engine Project 5 6 Royal Enfield Financials Investor Presentation 8 .Journey So far..... 1 2 Eicher Motors Limited .

1%   *Source – CMIE..5 9.5 6.8 7.000 km of highways in five years under the National Highways Development Program.India’s strong and sustained economic growth with increasing focus on infrastructure.8 6. RBI Investor Presentation 9 . significant growth seen in all sectors  Agriculture likely to grow at 5.95% by volume and 70% by value of India’s external trade takes place through ports Traffic at ports across India projected to grow at 11% CAGR during the new decade (2011 – ’20)  0  In 2010-11.500 BINR investment in 12th five year plan‘12 -’17 Targets total Infrastructure spending of 9% of GDP by 2014 8.7 8. proposes 4.6% . manufacturing sector registers 9.2  8 6 4  4.8 Highway construction target of 20 kms a day by 2012 vs current level of 12 kms a day Targets to construct 35..Trends 12 10 Increasing Focus on Infrastructure  Govt.7 6.4 5.6 7.2 9. Govt.4%. Industrial output grows by 8. plans to award 150 BINR mega road projects by Mar’11 Plan to increase port capacity .5 9 9.4 2 3. GDP Growth .

9 0 -11.4 345522 30.3 206369 8.9 352141 412454 60 50 40 350000 300000 250000 200000 150000 100000 306573 272434 30 20 10 1.9 -12.…presents significant opportunities for surge in commercial vehicles industry 450000 400000 Sales Volumes (Units) 51.1 268809 290520 18.1 50000 0 2003 Bus 2004 HD Trucks 2005 2006 Exports 2007 -10 -20 2008 2009 Growth (%) 2010 LMD Trucks Total industry 300000 Sales Volume (Units) 200000 100000 0 237439 263721 15 10 5 0 11.1 YTD July'10 Investor Presentation YTD July'11 10 % Growth .

Eicher Motors Limited Overview 3 4 India’s economic growth and opportunities for Commercial Vehicles Volvo Eicher Commercial Vehicles Limited  Eicher Trucks & Buses  Volvo Trucks India  Eicher Engineering Components & Eicher Engineering Solutions  Heavy Duty Breakthrough  Medium Duty Engine Project Royal Enfield 5 6 Investor Presentation Financials 11 .Journey So far.. 1 2 Eicher Motors Limited ...Moving forward..

developing Volvo Truck India’s world” components and engineering solutions businesses into VECV Global expertise Leadership in product technology Good infrastructure facilities Well-defined processes and controls Brand image and customer relationships sales & distribution business from Volvo India Pvt Ltd.VECV was established in 2008 with strong parentage Eicher strengths VECV vision   Volvo strengths     Leadership in LD / MD segments Specialist skills and experience in developing low cost. Investor Presentation 12 . better performance products Wide dealer network After sales infrastructure for LD / MD Cost effective operations “To be  recognised as  the industry leader driving  modernisation in commercial  transportation in India and the Volvo demerged Eicher transferred its CV.

VECV milestones  Dec 2007: Signing of Letter of intent          May 2008: Signing of definitive agreements Jul – Aug 2008: Commencement of JV Dec 2008: Volvo Board Visit Mar 2009: Launch of Quality Improvement CSI-1 Initiative April 2009: Inauguration of the new gear plant at Dewas Jan 2010: Launch of VE-series of Eicher HD trucks June 2010: Launch of MDE Project July 2010: Vinod Aggarwal takes over as CEO October 2010: Groundbreaking ceremony of MDEP plant site May 2008: Signing of definitive agreements Investor Presentation 13 .

VECV Overview Eicher Trucks & Buses Volvo Trucks India Eicher Engineering Components Eicher Engineering Solutions Medium Duty Engine Project Investor Presentation 14 .

000 Capabilities for machining and assembly of engines.000 trucks per year       Focus on adopting world class quality standards to become No.Eicher Trucks and Buses – Ambitions to achieve global benchmarks in product development and manufacturing capabilities Facility located at: Pithampur        State-of-the art manufacturing facility spread over 85 acres Annual Capacity = 48. gearboxes and axles Lean and scalable manufacturing setup Cab weld shop with robotic welding 100% hot test of engines CED Paint shop commissioned for capacity of 90. DFS failures simulations Investor Presentation 15 . 1 in Customer Satisfaction Product Development.000.Frugal Engineering driving future technology R&D expenditure of 2-3 % of net sales Fully equipped Vehicle & Engine development center with Fatigue lab Developmental support for technologies of Euro 5 & Euro 6 Volvo Group global requirement Complete virtual vehicle integration & different simulations to carry out DFA. upgrading to 100.

5-12 Ton GVW Range HD. 21 69 seater Launched in 2011 Dealerships (141) Service Centers (62) Semi Low Floor City Buses 25 Ton tipper Investor Presentation 16 . 16-40 Ton GVW Range Buses.Eicher Trucks & Buses is its widening product range and further strengthening its already extensive distribution and after market network Distribution and after market Network Product Range L/MD.

2% 27564 YTD July'10 Investor Presentation YTD July'11 17 .. continues to outgrow industry in 2011 45000 40000 35000 Sales Volume (Units) 26853 30136 4819 4219 38181 70% 50% 30000 25000 20000 15000 10000 5000 0 2003 2004 5T-12T Trucks 14063 20452 2027 3018 23839 2773 2345 3781 3857 23775 24264 30% 3236 4501 2942 2496 3282 1424 26426 10% 1392 953 14175 10604 16258 18961 19700 15804 16893 -10% -30% 2005 2006 16 T & above Trucks 2007 Buses 2008 Exports 2009 % Growth 2010 Sales Volume (Units) 30000 25000 20000 15000 10000 5000 0 21498 28.Eicher Trucks and Buses recorded highest ever volume in 2010.

Volvo Trucks India is the leader in specialised high end trucks.3 200 0 Mining Tipper 80 70 60 50 % FH520: The most powerful truck on Indian roads! Sales Volumes (Units) 1000 40 31. created high end mining tipper segment 1200 75.5 18.9 58.0 % Growth -10 -20 Aviation refueller Sales Volumes (Units) -30 -40 YTD July 2010 YTD July 2011 Investor Presentation 18 .2 30 22.7 20 10 -5.1 0 -10 Nos Growth (%) 2003 2004 2005 2006 2007 2008 2009 700 600 500 400 300 200 100 0 2010 0 -38.3 800 600 400 12.

Volvo Trucks India has a unique distribution and after market model Investor Presentation 19 .

Dewas . . Shanghai and Beijing Design.Overview of EEC & EES Eicher Engineering Components (EEC) Plants at: Thane.g. transmission gears and shafts Eicher Engineering Solutions (EES)   Location : Delhi. Caterpillar. VECV. Michigan. Pithampur  Supplier of drive line components and aggregates . EEC  Investor Presentation 20 . CAD. development and consultation services for customised engineering solutions.gear box assembly. John Deere. Michigan in 2005 & Hoff & Associates (HAI). Acquired Design Intent Engineering (DIE). CAE. prototyping) with a strong offshore Delivery model. Michigan in 2007   Caters to full requirements of Eicher Trucks & Buses and supplier to the Volvo Group Services a global client base including OEMs e.. Competencies for Volvo Group. CNH   Comprehensive product development services (Class A surfacing.

Turkey. Mauritius.1 10.0% Investor Presentation 21 % Growth KD Assembly operations in Egypt.9 30 % Growth 25 Export Volume (units) 2500 2000 1500 1000 500 0 2003 0 2004 2005 18.4 21. Kenya. Bangladesh & Mauritius .2 2 2006 2007 % Growth 2008 2009 2010 20 15 10 5 0 Export Volume      Presence in 22 countries Homologation in 10 countries Export Volume (Units) 2000 1500 1000 32.1% Local Bus body building facilities in Egypt.Eicher Truck & Buses is widening reach in overseas markets 3000 35 29.4 5.6 10. Nepal & Bangladesh Volvo and ETB jointly exploring opportunities in ASEAN and Africa 500 0 YTD July'10 YTD July'11 0.

Breakthrough into Heavy Duty category is critical to VECV. after market.7% 3%  HD trucks have rapidly acquired market share since 2010 22 0 YTD July'10 YTD July'11 1% Investor Presentation . an extensive study was initiated in ETB to gather deep insights strategy required in the Heavy Duty segment The study spanned customers.. product and operations 1st phase of insights implemented 4500 4000 3500 2..early success is evident 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2% 2% 2% 3% 2% 2% 2% 1% Sales Volume 1% 1% Market Share 0% 2006 2007 2008 2009 2010  In 2008..8% 5%   3000 2500 2000 1500 1000 500 1.

VE Commercial Vehicles & Peter Karlsten .MD.Medium Duty Engine Project will provide technological advantage and cushion in times of adverse business cycle  Futuristic global engine platform to power the medium duty range of trucks within Volvo group and Eicher Truck VECV will manufacture Euro 3 and 4 compliant engines and Euro 5 & 6 base engine. Volvo Power Train at the MDE Project groundbreaking ceremony.      Siddhartha Lal . The engines will be of 5 & 8 litre capacity New facility in Pithampur to be the Global Manufacturing hub and Industrial base Investment of 2880 MINR for the state-of-the-art facility for phase 1 Will be operational by December 2012 Annual Production capacity in Phase 1 .President & CEO. October 2010 Investor Presentation 23 .85000 engines.

Wanted position in 2015 Wanted position 2015: Strategic  Most innovative products covering entire range  Comprehensive network  Proactive solution / service provider  Lean organization Sales in units Wanted position 2015: Operations Market share (2015) Seen as a leading CV group in India Bus 100.000 0 26425 4219 2010 2015 44.  people caring to attract best talents in industry  Long term operating margin target >8% over a business cycle  Customer satisfaction to reach >80% Investor Presentation 24 .400 35% Recognized competitive advantages  Best fuel economy  Reliable products  Superior service quality  Safety and comfort setting industry standards 40. honesty.VECV .500 16% 38181 inclusive of 2717 exports 36.000 60.000 LD/MD HD 100.000 including 11000 exports 80.000 17.000 15% "Best of both" company culture  Culture incorporating best of Eicher values and Volvo Way  Professionalism.000 4819 20.

.Moving forward.Journey So far. Eicher Motors Limited Overview 3 4 India’s Economic Growth and Opportunities for Commercial Vehicles Volvo Eicher Commercial Vehicles Limited    Eicher Trucks & Buses Volvo Trucks India Eicher Engineering Components & Eicher Engineering Solutions  Heavy Duty Breakthrough  Medium Duty Engine Project 5 Royal Enfield Financials 6 Investor Presentation 25 . 1 2 Eicher Motors Limited ....

nacelle and toolboxes contribute to its “distinctive classic” appeal. Push-rod &Valve operated for the distinctive Bullet beat.Single Cylinder. 1994: Eicher Motors acquires Enfield India Ltd. Investor Presentation 26 . Air-Cooled. 1950’s style. Royal Enfield Motorcycles are unique in terms of the engine character .Royal Enfield Royal Enfield “Bullet” is the longest running model in continuous production. 1901: Royal Enfield rolls out its first Motor Cycle 1955: Enfield India is incorporated. The authentic vintage styling . traditional paint schemes.

the year of transition.After successfully managing 2010.1 1.8% 50 40 30 20 10 0 .2 1.7 5.7 2004   In 2010.2 2005 2006 2007 2008 2009 2010 20 20 Growth (*%) 15 10 5 0 Sales Volume(units) 50000 40000 30000 20000 10000 0 Sales Volume Growth (%) 4. Royal Enfield transitioned to Unit Construction Engine.7 12. new engine platform Unrivalled brand image has created unmet demand: 6-10 month waiting period YTD YTD July'10 July'11 Bullet Investor Presentation Thunderbird Classic Café Race A future launch 27 Growth (%) 2003 Sales Volume (units) 50000 40000 30000 20000 10000 0 39. Royal Enfield continues to grow and evolve 60000 25 17.5 7.

there are 175 distribution and after market points in India. New platform under consideration Distribution and after market footprint • Increase reach in India and global markets • Currently.000 motorcycles in 2011 • Expand capacity to 150. expected to start commercial production in 1st half. 000 by setting up 2nd manufacturing site . 2013 Improve profitability • Focus on cost management • Exploit significant opportunities that exist in after market New product launches • New product launches planned for 2012 and 2013. Exports to more than 30 countries Investor Presentation 28 .Plans being executed for profitable growth Enhance production capacity • Enhance production capacity to 70.

Eicher Motors Limited Overview 3 4 India’s Economic Growth and Opportunities for Commercial Vehicles Volvo Eicher Commercial Vehicles Limited    Eicher Trucks & Buses Volvo Trucks India Eicher Engineering Components & Eicher Engineering Solutions  Heavy Duty Breakthrough  Medium Duty Engine Project 5 6 Royal Enfield Financials Investor Presentation 29 . 1 2 Eicher Motors Limited .Moving forward.....Journey So far.

7% 8803 8.0% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 5.Consistently improving performance – all time high sales and margins in Q1’11 16000 14000 9.0% 4.7% 13897 12984 12.0% .0% 4000 2000 0 Total Net Income (MINR) Operating margin Investor Presentation 30 % Operating Margin 7.8% 5958 6195 6.8% 6.6% 2.0% 14.6% 10984 12435 10.1% 10409 11.7% 8.0% 2.8% 8593 8000 6000 6.2% 10385 9.0% 0.0% 12000 Net Income (MINR) 10000 8.

1 Q4'09 Q1'10 Q2'10 Q3'10 -405.2 -924.CY 10 Peers Investor Presentation 3260 4512 43970 9.8 1.0 Q1'09 -500.1 Q1'11 Q2'11 In MINR -313.0 0.2 .0 -1500.5 1-1.0 -2000.5 31 .5-2.1 Q4'10 -974.0 Operating Working Capital -1347.2 Best in class capital to turnover drives RoCE to >100% Operating Capital EML Consolidated .5 13.2 89.6 -949.0 -1000.1 -1717.0 500.CY 09 3195 In MINR Net Block 3757 Net Sales 29386 Sales/ Assets 7.8 Sales/ Operating Capital 9.8 906.5 Q2'09 Q3'09 825.Optimizing capital deployment through relentless focus on cash management 7 consecutive quarter of negative operating working capital 1500.0 1000.

plan to build brand with drivers off-product as well Value-selling approach.VECV well positioned to take advantage of discontinuities in Indian CV space Discontinuity Continued tightening of emissions and safety norms Better enforcement of regulations on overloading Implication VECV Strategy/ Advantage Legacy investments of players less VECV investing early in fully-built vehicles and meaningful higher emission norms Right-load vehicles. potential to change value-proposition Products highly suitable for right-load and mild over-load conditions Better highways and increased road networks Increasing difficulty in sourcing drivers Professionalisation of transportation/ logistics Higher speeds. increased mileage of vehicles/ year Drivers will be more influential in purchase decision Total cost of ownership approach to buying vehicles Better and more reliable engines and driveline Better comfort and features for drivers. premium products with better efficiency and turnaround time. developing innovative products that are closely aligned to emerging customer needs …will be introduced from 2012 Investor Presentation 32 . world-class after-market and vehicle quality End-use demands on logistics/ supply-chain Market shifts faster towards ‘premium domestic’ segment Improved dependability of supplies required More modern trucks with right cost-structure and value Vehicle quality and after-market excellence VE-series is starting point.

maintain lead for Volvo brand  Realise full potential of niche market through capacity expansion. exports using Volvo’s existing distribution strength  Set benchmark in Aftermarket and Quality in India. cost optimisation and geographical expansion Investor Presentation 33 . where general level is poor – establish a strong differentiation for Eicher brand in these areas.Grow through soft products.Recap…Eicher well poised to succeed  Strongly positioned to gain scale and profitability in Low and Medium through improved offerings  Become meaningful player in Heavy Duty through differentiated products. after markets and brand leverage  Gain volumes and market share in Bus market through better products and market expansion  Increase margins and reduce cyclical business dependency . Medium Duty Engine Project .

Actual results may differ materially from those expressed in the statement. This presentation also contains references to findings of various reports available in the public domain. changes in Government regulations. Company’s operations may be affected with the supply and demand situations. Investors should bear the above in mind while going through the presentation. input prices and their availability. tax laws and other factors such as Industrial relations and economic development etc. Eicher makes no representation as to their accuracy or that the Company subscribes to those findings. objectives etc may be forward looking within the meaning of applicable laws and regulations.Disclaimer Certain statements in the presentation describing the Company’s views about the Industry. expectations/predictions. Investor Presentation .

THANK YOU Investor Presentation .

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