CV industry likely to grow 15-18% in FY12: Eicher Motors

In an interview with CNBC-TV18, Siddharth Lal, CEO of Eicher Motors said, Finance Minister's proposal of not increasing the excise duty to 12% came as a relief to the industry.

"It would have upset the applecart, if it was increased or rolled back and then again change it in few months," he added. He expects the commercial vehicle (CV) industry to grow at rate of 15-18% in FY12 and his company aims to beat the industry. Below is the verbatim transcript of Lal's interview with Sonia Shenoy and Latha Venkatesh of CNBC TV18. Also watch the accompanying video. Q: What are your thoughts post the budget? The excise rollback not taking place, how much relief do you prove to be for the sector? A: It is certainly good thing because it is in line with the GST which is hopefully coming in at some point. It would have upset the applecart, if it was increased or rolled back. And then again change it in few months. It has been a relief and to that extent no news is good news. It will encourage the industry to move forward as it has been in the last few months. Q: Coming to your numbers, there has been a good amount of recovery that you have seen in profitability. In the last four to five years, your margins had depleted to single digits, now it is back on the 10% margin or so. How the business is shaping up? How the Volvo-Eicher JV is doing? You have a new outsourcing business as well. How all of that will help you in your profitability? A: Our commercial business that is the joint venture with Volvo is doing phenomenally well on both the qualitative side and the quantitative side.
We are on the path to transform the Indian commercial vehicle in some sense through modernization. This will take time and will not happen immediately We have started improving the benchmark of quality of product in India and particularly of customer service and satisfaction. Our market shares are rising throughout. Our net realisations in the market have gone up and that has improved our sales, market shares and margins at the same time. It has been very good going for the last couple of years which has culminated into good numbers in the last few quarters. Q: So what margins can you hold on to then for the next year? A: We don