Eicher Motors’ focus on long-term performance to improve marketshare

For the nine months ended September 2012, Eicher Motors Ltd. (EML) registered total income from operations of Rs. 4,736.3 crores, operating EBIDTA of Rs. 431.1 crores and PAT of Rs. 369.7 crores.

For the third quarter ending September 2012, total income from operations was at Rs. 1,483.1 crores, operating EBIDTA at Rs. 111.4 crores and PAT at Rs. 93.7 crores.

Striking a note of optimism, Mr. Siddhartha Lal, Managing Director & CEO, Eicher Motors Ltd., observed: “Though the third quarter has been impacted by the tough market conditions, we are focussed on the long-term while continuing to improve our market share in the short-term. As a result, in VECV, though the third quarter has been challenging, we have regained market share across various categories.

In October 2012 VECV’s Eicher Trucks and Buses Division registered an all-time high monthly market share of 15.3 per cent compared to 13 per cent in the corresponding period last year. We continue to invest in building new capacities towards modernising the CV industry.”

He added: “Of course, we are in the midst of a cyclical downturn that has affected the entire commercial vehicle industry and, as a result, this quarter has been tough for Eicher Motors as well. However, even in these challenging times our quarterly total income from operations was at Rs. 1483.1 crores, which is up by 3.2 per cent over Q3 2011.”

For the quarter ended September 2012, VECV’s Eicher Trucks & Buses Division (ETB) sold 10,661 units as compared to 12,421 units in the corresponding period last year. In the 5-14T segment, ETB sold 6,289 units registering a decline of 17.9 per cent in Q3 2012 over the corresponding period last year.

This mirrors the overall industry decline of 17.6 per cent in this category. ETB retained 29.5 per cent market share in Q3 2012. In the heavy duty segment, ETB’s sales volume declined in Q3 2012 by 12.3 per cent to 1,615 units from 1,841 units.

It is pertinent to note that the heavy duty industry segment declined by 14.1 per cent in Q3 2012 over Q3 2011. ETB’s market share in the segment continues to be maintained at 3.2 per cent.

In the bus segment, ETB continued to outperform the industry and achieved a new high in its market share. Quarterly volumes stood at 2,326 units being sold in Q3 2012, registering a growth of 16.8 per cent over the corresponding period last year. The market share in the bus segment in Q3 2012 has gone up to 13.7 per cent from 11.2 per cent in same period last year – an all-time high.

Commenting on VECV’s performance, Mr. Siddhartha Lal said: “Despite a sluggish quarter, overall VECV’s Eicher Trucks and Buses Division (ETB) continues with its resilient growth story. For YTD September 2012, ETB has increased its market share across the various product categories. It continues to outpace the industry in the heavy duty segment with a volume growth of 12.4 per cent in YTD September 2012 even as the industry has declined by 11.7 per cent in the same period. This resulted in an increased market share of 3.7 per cent for YTD September 2012 as compared to 2.9 per cent in the same period last year. ETB’s bus segment has increased its market share to 12 per cent in YTD September 2012 as compared to 10.2 per cent in the corresponding period last year. For YTD September 2012, the volume growth in the bus segment was 32.7 per cent, after selling 7,153 units in YTD 2012 as compared to 5,391 units in YTD September 2011, thereby significantly outperforming the industry. The industry for the same period grew by 13.4 per cent. In the 5-14T LMD segment, while ETB’s volumes have declined by 3.9 per cent for YTD September 2012, it still continues to be ahead of the industry that has declined by 4.1 per cent in the same period. Hence, ETB continues to maintain its market share in the LMD segment at 30.3 per cent for YTD September 2012.”

He also said that Volvo Trucks India (VTI) launched in October the new Volvo FM480 10×4 Dump Truck in India, built specifically for deep opencast mining. This product is poised to be a game changer in mining applications business to create value for its customers, especially when the business is tough for everyone in the mining sector. This is the biggest truck launched by Volvo in India.