Eicher Motors targets 15% mkt share in HCVs in next 3 yrs

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Eicher Motors targets 15% mkt share in HCVs in next 3 yrs

Eicher Motors is betting on growth. It hopes to capture nearly 15% of the market in the next few years. The company has laid out an aggressive expansion plan. The company wants to have a foothold reach in every segment of the commercial vehicle market.

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Siddhartha Lal was beaten by the biking bug when he was just 18. He chose a road that leads him to Royal Enfield, the motorcycle division of his family business. A third generation entrepreneur and a trained automotive engineer, Siddhartha rouse his way to the top in 2006 as the CEO and Managing Director of the Eicher Group.

Eicher began its business in manufacturing tractors in 1959, a business it has moved out of. Since then it has diversified and has a presence in over 40 countries across the globe. But the road hasn't been without its hurdles. The group is now betting on joint venture with Volvo to muscle its way into the commercial vehicle business.

The company is betting on growth. The commercial vehicle manufacturer hopes to capture nearly 15% of the market in the next few years. The company has laid out an aggressive expansion plan and wants to have a foothold reach in every segment of the commercial vehicle market.

In an interview with CNBC-TV18, Lal spoke about his journey so far at Eicher  Motors and the road ahead.

Here is a verbatim transcript of the exclusive interview with Siddharth Lal on CNBC-TV18. Also watch the accompanying video.

Q: The last I had a sort of in-depth conversation with you, was in 2002 almost seven years ago. At that point, I remember you were struggling with putting Royal Enfield back on track and you set yourself a two year time period by when you would turn things around. What is the current battle that you are waging?

A: Battles will continue always and of course the Royal Enfield one has gone through many turns and many phases and currently we are doing exceedingly well in the Royal Enfield part. We managed to do what we were planning to do from 2002 to 2004. The motorcycle business has really come of is age. Battle currently is of course very different battle; it's the heavy-duty battle in trucks and that's what is a next big frontier is.

The Indian heavy-duty market, the commercial vehicle market in my opinion has been behind in terms of technology and other things; you have seen what's happen to the motorcycle industry with Hero Honda coming in the '80s, you have seen what happened to the car industry with Maruti Suzuki coming in but that's not happened in the commercial vehicle industry; its still very backward.

Q: So you are hoping to be the Honda and the Maruti Suzuki of the commercial vehicle space?

A: Absolutely.

Q: That's the aspiration?

A: Aspiration is that yes.

Q: How do you intend to do because you have got this joint venture now with Volvo -- 54% to you about 46% is what Volvo has in that joint venture. You have got two very large entrenched players - Tata Motors and Ashok Leyland; you know about the rule of three so how you actually expect to move ahead in this market and gain market share?

A: The market is enormous, from its revenue standpoint it's around maybe 30,000 crore in good year and going up to maybe 50,000 crore. As you said there is certainly placed for more than two players and we expect that there will be many more players in the commercial vehicle market.

The incumbents are not going to hand their share to anybody, they have been around for 50-60 years in the market. But we see a lot of gaps in the market today. We see that it's really not modern in many aspects.

The products are old fashioned, they are absolutely unsafe, they are underpowered and they are not even as reliable as they should be - that's the first thing and we have enormous product pipeline now underway which is been co-developed along with the Volvo technology and along with the incumbent, inherent strength that Eicher has.

So that's one entire side of it. But actually the more important side is the consumer side. We believe that the consumers actually are quire neglected.