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Neha Kaushik

New Delhi , March 2

EICHER Motors Ltd, which has a market share upwards of 30 per cent in the 7-11-tonne commercial vehicles segment and is evaluating a proposal to sell off its tractor and engine business to TAFE, is believed to be exploring several options to acquire new technology to expand its product portfolio.

According to industry buzz, the options could include technology tie-ups or even acquisitions that will enable the company to launch new products in the passenger carrier and heavy commercial vehicle segments. Further, the company is believed to be considering a foray into the sub-five-tonne commercial vehicle (CV) segment.

Analysts point out that the sale of tractor and engine businesses would provide the company the financial strength to focus on the CV business and increase capacity (currently at more than 20,000 units per annum) at its unit in Pithampur. Industry sources point out that the sell-off may fetch Eicher about Rs 300-350 crore.

In fact, revenue from its CV business has soared in recent months. It has increased by about 54 per cent to Rs 799.53 crore in the April-December 2004 period, compared to Rs 518.25 crore in the same period in the previous year.

Analysts point out that the company's new launches in the heavy commercial vehicles (HCV) segment have received a good response. Its recent foray into the multi-axle segment with Galaxy 30.25 and Galaxy 33.25 offering higher power in the 25-tonne segment along with an entry in the 4x2 tipper market are expected to expand its presence in HCVs.

In fact, Eicher's market share in the medium and heavy commercial vehicles (M&HCVs) has been on the upswing. In the first ten months of the current fiscal, its market share in the M&HCV goods carrier segment has increased to 8 per cent from 6.2 per cent.

Industry watchers add that in addition to the M&HCV segment, exports may be another focus area for Eicher following the sell-off. Interestingly, the company had recently acquired the automobile export business of Eicher International Ltd.

In addition to the commercial vehicle business, Eicher Motors would be left with the motorcycles business, the gears unit in Thane and the engineering solutions business after the proposed sell-off of the tractor and engine business and the gears unit at Parwanoo.

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