Eicher Motors sales go up by 7% in May 2008

Eicher Motors has reported a seven percent increase in total sales in May 2008 at 2,063 units, against 1,931 units it sold in the same month last year. Domestic sales during the month stood at 1,980 units as compared to 1,786 units in May 2007.

Exports during May 2008 stood at 83 units, down from 145 units in the corresponding month last year. Cumulative sales during the fiscal saw an increase of 12 percent to 4,065 units from 3,645 units it sold in the same period last year.

Eicher’s overall domestic sales during the fiscal also grew by 12 percent at 3,841 units from 3,440 units in the same period a year ago.

Eicher-Volvo JV finalized, Volvo to invest Rs 1,082 crore

Volvo wants a bigger chunk of the fast-growing Indian CV market

Eicher Motors Limited (EML) and Volvo have finalized their joint venture, and Volvo will be investing Rs 1,082.1 crore in this deal. Eicher Motors will hold 54.4 percent stake, while Volvo will hold 45.6 percent in the JV.

‘The commercial vehicles business, along with related components and design services of EML will be transferred to the joint venture company, which will be an unlisted subsidiary of EML, on a slump basis, at a value of Rs 202.2 crore,’ said Siddhartha Lal, MD, EML. He added that as a part of the JV agreement, Volvo will transfer its Indian truck distribution and service network business to the new venture. Lal also said that Eicher Motors will look at exporting Eicher trucks through the Volvo network.

‘India is the fourth largest market for heavy trucks in the world, and with the country investing heavily on improving infrastructure, there is a big opportunity for us,’ said Par Ostberg, Volvo Group executive management member, and Volvo Trucks Asia chairman. He added that all Volvo Group truck projects in India would be routed through the JV with EML, and that Volvo may look at entering the commercial vehicles financing business, in which it is has been very successful worldwide.

In the meanwhile, Eicher Goodearth Investments Ltd., the holding company of Eicher Motors, is considering buying back 13.12 percent of the public holding in Eicher Motors for Rs 691.68 per share.

Volvo stake in Eicher approved by the FIPB, FM

Volvo wants 8.1% of Eicher

The finance minister, Mr Chidambaram and the Foreign Investment Promotion Board (FIPB) have approved Volvo’s proposal to acquire 8.1% of Eicher Motors Ltd. Volvo, the world’s second-largest manufacturer of trucks, had announced last year that it wanted to buy a stake in Eicher Motors, India’s third-biggest truck maker.

India is the world’s fifth-largest market in the world for trucks, and Volvo, by forming a JV with Eicher, wants to strengthen its presence in the country and increase its market share.

Since it involves more than Rupees six billion, the Swedish company’s proposal will now be referred to a cabinet panel on economic affairs.

New JVs to drive growth in the Indian commercial vehicles sector

There's just no stopping the Indian CV sector now...

The commercial vehicle segment in India will soon witness a lot of action from new as well as established players, even as new joint ventures are being formed, investments are being made and products are being readied for launch.

The recently announced Daimler Hero Motor Corporation (DHMC) will also start making trucks under a new brand name by the year 2010, and apart from catering to the Indian market, the company will also explore the export market.

Daimler Trucks, a division of Daimler AG, has five truck brands in its portfolio – Mercedes-Benz, Sterling, Freightliner, Western Star, and Mitsubishi Fuso. With a wide range of trucks to choose from Daimler Trucks’ range, and with the Hero Group’s marketing and supplier network, DHMC could be in a powerful position in the Indian CV market within the next five years.

Initially, the company will only look at light and medium commercial vehicles, and will add HCVs to its lineup only after 2012. Apart from introducing CVs from the Daimler Trucks range, DHMC will also develop light, low-cost CVs especially for the Indian market.

DHMC isn’t, of course, the only new player in the Indian CV scenario. Nissan has tied up with Chennai-based Ashok Leyland, and will manufacture LCVs and small trucks for the Indian market. Navistar, the world's fourth biggest manufacturer of trucks, has tied up with the Mahindras to produce HCVs for the Indian market. And German company, MAN (Europe's third-largest CV manufacturer), had formed and a JV with Force Motors, and the company has set up a new manufacturing plant near Indore, in MP, to build up to 24,000 CVs per annum.

Older, more established players are also taking steps to ensure that they stay at the top of their game. Volvo, for example, has picked up a stake in Eicher Motors, investing US$350 million in the new partnership, and the Swedish company will now control Eicher’s truck, bus and auto components businesses.

Whichever way you look at it, the Indian CV segment looks all set for some frenetic activity over the next few months.