Eicher Motors Limited · NSE:EICHERMOT
Eicher Motors — Investor Presentation (March 2012)
28 slides from Eicher Motors's investor presentation, Mar 28, 2012
Slide 1: AB Volvo & Eicher Motors Investor's Meet
AB Volvo & Eicher Motors Investor’s Meet March 28th , 2012 - Pithampur Journey of VECV Vinod Aggarwal, CEO
Slide 2: Contents
Contents Business Environment VECV Overview Strategies and Outlook 2
Slide 3: Indian Economy
Indian Economy *3.2% *9.4% *3.6% * %growth in April to Dec 2011 • India GDP @ 1.85 TUSD Nominal GDP (2011) is the 9th largest; 3rd largest by PPP at 4.47 TUSD. • Economy bounced back strongly from downturn in 2008-’09 with 8% y-o-y GDP growth • Favorable demographics , fast growing middle class; 1.2
Slide 4: India Infrastructure Outlook
India Infrastructure Outlook 11th Plan Investments BUSD (2007 - '12) Infrastructure investments 1200 Others, 1000 1000 81, 16% Railways, Electricity, 800 BUSD 50, 10% 165, 32% 600 513 400 Telecom, 226 62, 12% 200 Irrigation, 0 Roads, 70, 10th Plan 11th Plan 12th Plan 13% 86, 17% (2002-'07) (2007-'12
Slide 5: Strong Drivers for CV Segment
Strong Drivers for CV Segment Demand drivers 5-49 T CV Segment: Domestic and Exports Strong domestic economy with untapped rural market Buses (5T - 16.2T) Trucks L&MD (5T - 12T) 12th Five year plan ambition – huge Trucks HD (16T & Above) Exports focus on infrastructure 500000 400000 Strict implement
Slide 6: VECV Milestones since inception
…VECV Milestones since inception… Jan 2010: Launch of VE-series of Eicher May 2008: Signing of definitive agreements HD trucks Jul – Aug 2008: Commencement of JV Oct 2008: Volvo Board Visit Inauguration of a new 3 S dealership May 2010: Launch of MDE Project April 2011: Reliability Lab Inauguration
Slide 7: VECV Strategic Direction
49043 VECV Strategic Direction 39295 Unit Sales 25165 •To be recognized as the industry leader driving modernization in commercial transportation in India and the developing world 2009 2010 2011 •Ambition to reach 100,000 unit Sales by 2015 •Innovative products covering the entire product range •Com
Slide 8: VECV Establishment
VECV Establishment Pithampur Delhi Eicher CV Manufacturing VECV HQ Pithampur (SEZ) EEC Gearbox Facility Dhar Bus Body Plant Pithampur VEPT Plant Dewas EEC Gear Plant *Abbreviation : Thane Bangalore EEC – Eicher Engineering Components VEPT – VE Power Train EEC Gear plant Volvo Trucks office SEZ – Spe
Slide 9: Strong Corporate Governance
Strong Corporate Governance • Institutionalized strong Corporate Governance at VECV • 3 members from AB Volvo and 3 members from EML on VECV Board • Strong Management Team. Aligning with Volvo AB new organization structure 9
Slide 10: VECV Board
VECV Board Par Ostberg VECV Board Chairman Siddhartha Lal Bertil Thorén Philippe Divry Raul Rai Prateek Jalan EML AB Volvo JV Group AB Volvo JV Group EML EML 10
Slide 11: VECV Executive Management Council
VECV Executive Management Council Vinod Aggarwal CEO Amanpreet S Bhatia G.V. Rao Sr VP HR Sr VP Strategic Planning Gilles Boutte CFO Ryouji Ono Head – Quality Management Office Rajesh Mittal G.Sekar A.Sreerama Rao B Anil Bailga Arun Birla S.R.Mukherjee Curtis Hoff Sr VP –Manufacturing Sr VP Sr VP Af
Slide 12: VECV Performance
VECV Performance 2011 Performance Revenue (MINR) Operating Margin (%) Return on Equity (ROE) 24% Return on Capital employed (ROCE) 95% 60,000.00 10.0% Operating Margin 9.4% 9.4% 8.0% 7.6% Historical Parameters 40,000.00 49,156 6.0% Cash generation since inception of 12 BINR / Revenue (MINR) JV: 1.7
Slide 13: Robust Industry growth .... outpaced by VECV
Robust Industry growth .... outpaced by VECV Indian CV Industry (5-49 T GVW) VECV Domestic Sales & Market Share 50000 HD Bus LMD 500000 HD Bus LMD 3.4% 8058 40000 400000 10% 6496 300000 30000 3444 2.1% 200000 20000 31% 2942 6% 31381 100000 10000 15804 27% 0 0 2008 2009 2010 2011 2008 2009 2010 2011
Slide 14: LMD Trucks: on a strong footing
LMD Trucks: on a strong footing 31% 27% 33320 15804 2008 2011 10.55 10.80 XP Tipper 11.10 XP 10.59 XP CNG 10.95 CNG Creating 2010 New Products & New 2011/12 Segments New E2 plus 11.14 11.10 XP Container 11.12 XP Increase Geographic Increase Market Enhance Value Delivery Coverage Penetration 14
Slide 15: Buses: Dual Range, increased penetration
Buses: Dual Range, increased penetration 10% 6% 6952 2948 2008 2011 Skyline Starline 10.90 L CNG 10.50 CNG Creating 2009/10 New Products & New 2011 Segments BS IV 20.15 Chassis Skyline 20.15 Rear-Engine SLF Increase Geographic Market development Focus on growth in all Coverage through Brand building
Slide 16: HD Trucks: Strong inroads, biggest opportunity
HD Trucks: Strong inroads, biggest opportunity 3.1% 2.1% 3861 8065 2008 2011 Launched in Jan 2010 VE Series-Jan 35.31 26ft 30.25 All terrain Creating 2010 New Products & New 2011 Segments Terra 25 Terra 16XP 20.16 M FCWC 20.16 R FCWC Increase Geographic Augmenting Service Focus Locations & Ramping F
Slide 17: HD Gaining Momentum through VE Series
HD Gaining Momentum through VE Series 4X2 Truck Mkt Share 4X2 Tipper Mkt Share VE Series Grew by Industry Grew by HD VE Series grew 6 times more 12% than Industry 74% Growth Repeat purchases of VE Series Growth account for almost 1/3 rd of sales 17
Slide 18: Volvo Trucks Product Range in India
Volvo Trucks Product Range in India Distributed by VECV FM 370 / 400 FM 400 FMX 440 FH 520 FM 400 FM 400HD FM 480 6X4R 8X4R 8X4R 6X4 Puller 6X4T 6X4T 6X6T 70% Market share in European segment…defining premium trucks business in India … 18
Slide 19: VECV Trucks and Buses Distribution network
VECV Trucks and Buses Distribution network Eicher Truck & Bus Network Volvo Truck & Bus Network • 144 3S touch points • 76 Authorized service centers • ~60% own Dealerships • 20 Spare parts Distributors Over 150 touch points with customized 220 touch points and growing… aftermarket model… 19
Slide 20: After-market Parts Proliferation
After-market Parts Proliferation New Parts warehouse at Pithampur Front End Parts proliferation Expanding consumption Touch points & Distribution reach Under commissioning Use of Technology & Volvo best Ordering & practices for delivery of planning & Parts in time Logistics 20
Slide 21: VECV Exports focus in emerging Markets
VECV Exports focus in emerging Markets 3108 2665 2717 2533 2008 2009 2010 2011 Presence in 22 Countries. Export Strategy: Leveraging Volvo Distribution and develop Country-specific products 21
Slide 22: Product Development and Manufacturing
Product Development and Manufacturing Frugal Engineering and lean manufacturing setup •Product Development spend is 2.0~2.5% of the Turnover •PD Manpower of 300 in 2011 will be going up to 450 by 2012 •HD Platform indigenously developed at very low cost. • End – End product development capability –
Slide 23: VE Powertrain (VEPT)
VE Powertrain (VEPT) Paving way for technology leadership • Global engine platform for Medium Duty Engines (5 litre and 8 litre) for Volvo Group . • Investments of 3.25 BINR / 450 MSEK for industrial infrastructure and 1.25 BINR / 175 MSEK for Product development • Planned capacity of 100,000 engine
Slide 24: New Bus Body building plant
New Bus Body building plant • Create in-house capability for building bus bodies • Investment of 1.25 BINR / 175 MSEK in phase-1; 1.8 BINR / 252 MSEK in phase-2 • Annual Capacity : 10,000 units, Phase-1 capacity 5000 units • Product Range: Light, medium and heavy buses • Rear engine semi low floor b
Slide 25: Other VECV Business Areas
Other VECV Business Areas Components and Engineering Solutions Eicher Engineering Components (EEC) Eicher Engineering Solutions (EES) •Strategic supplier of drive line components to Eicher •Annual turnover of 581 MINR / 83 MSEK in 2011 Trucks and Buses, with ambition to supply to the Volvo Group in
Slide 26: Complete Product Renewal
Complete Product Renewal Changing Landscape Future • Road Infrastructure improving, hence faster movement possible • Changing Transport economy dynamics Sustained Fuel-efficiency Edge • Emission norms to BSIV(Euro 4) Enhanced Reliability, Durability & comfort Contemporary design with value-add
Slide 27: Key areas of Synergy with AB Volvo
Key areas of Synergy with AB Volvo Product Development process Technology areas, like Engine Cabin Vehicle analysis & Simulation Softwares Quality Management Office .- CSI1 initiatives with support from UD. Productivity Management Office with support from UD Volvo Parts for effective P
Slide 28: Thank You!
Thank You! == VE COMMERCIAL VEHICLES == AVOLVO GROUP AND EICHER MOTORS JOINT VENTURE