To launch Thunderbird 500cc in few months

Eicher Motors will replace its entire commercial vehicle range by 2014-15. This is part of the Rs 1,000-crore investment planned over three years in Volvo-Eicher Commercial Vehicles (VECV).

Siddhartha Lal, Managing Director & CEO, said, “We are developing new platforms and engines internally under this programme. We plan to renew the entire range.” He was speaking at a post-earnings media call.

However, he added that the company is not planning vehicles below 5 tonne. Led by Tata’s Ace range, the light CV segment (about 0.7 to 2 ton) segment has seen a sharp growth in recent times.

Eicher Trucks and Buses is a brand under VECV - an equal joint venture between Sweden’s Volvo AB and Eicher. It also distributes the Volvo truck range in India.

Royal Enfield models

Group company Royal Enfield will launch a new 500cc variant of the Thunderbird motorcycle in a few months, Lal said. The manufacturer of the famous ‘Bullet’ range will also launch a new model, the ‘Café Racer’, by the first half of next year.

With annual output of bikes more than doubling to 1.5 lakh units by the first quarter next year, the company expects sales to grow 30 per cent in 2013 to 13,000 units a month. It has invested Rs 150 crore in a new Chennai plant for this.

“Royal Enfield sales crossed the 10,000 units a month mark for the first time in July. We believe it will sustain for the rest of the year,” Lal said. The bikemaker sold 75,000 units last year.

Margins Under Pressure

Due to high discounting in the CV segment, Eicher said margins have been under pressure in the January-June period. Medium and heavy CV segment has dipped 13 per cent to 89,226 units in April-July.

“There is stress on profitability because market is on a low. On operating margins there were issues on incentives in terms of pricing. This will continue till the industry picks up,” Lal said.

Eicher reported flat net profit of Rs 76 crore on a consolidated basis for the June quarter. This was largely on a one-time gain (bulk interest income) in the corresponding quarter of the previous fiscal. Consolidated net sales were up 24 per cent to Rs 1,573 crore.

Eicher Motors shares on the BSE were down 0.55 per cent to Rs 2,069.75 on Friday.

(This article was published on August 10, 2012)
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