A homegrown company that has made the lives of MNCs miserable!
In 1982, Eicher Motors Limited (EML) was incorporated, as an Indian automaker company. It is the flagship company of the Eicher Group. The company's story started with the production of India's first agricultural tractor in 1959.
In 2012, Eicher Motors and Polaris Industries, US, announced a Joint Venture which designs, develops, manufacture and sell a full new range of personal vehicles.
The story does not end here!
Royal Enfield, the leisure bike manufacturing company, is also a subsidiary of the Eicher Group.
In the 80's, Eicher Tractors, under Vikram Lal, was one of the leading tractor manufacturer in India. The success of this industry led to the business expansion, when in the 80's, Eicher announced a strategic Joint Venture with Mitsubishi Motors, Japan, for the design, manufacturing and sales of trucks and canters.
Later, in 2000, the company faced losses, and the conventional wisdom was to dispose off the Royal Enfield business. But, Siddhartha Lal, Vikram Lal's son, convinced his father to give him two years of "grace period" to turn the Royal Enfield business around.
Within 12 years, not only did he turn the Royal Enfield business around, but also restructured the group flagship, Eicher Motors, often going against the analyst and consultant wisdom.
In 2005, he decided to cut down the focus to a fewer businesses, namely commercial vehicles.
So, he decided to dispose off the garments, hand tool and a couple of other businesses.
Later in 2005, the Eicher Tractor business, also known as their "family silver", was sold to TAFE Tractors of Chennai, India.
So presently, how is Eicher Motors performing?
Siddhartha Lal now devotes 50% of his time on Royal Enfield business.
The automotive industry in India is one of the largest automotive markets in the world. In this industry, the foreign automotive industries manufacturing and selling in India, play a major role in the growth of this industry.
But, the Indian-origin companies too play an important role in the same. Some of the top Indian players include Mahindra & Mahindra, TATA Motors, Eicher Motors, Hero Motocorp, Bajaj Auto, TVS Motor, AMW, Force etc.
This story focuses on how a tractor distributor company shaped it's path to become one of the key players in the modern auto industry : EICHER MOTORS
But first, tell me something about Eicher Motors!
The company's origins date back to 1948, when Goodearth Company was established for distribution and services of imported tractors. Later, Eicher Tractor Corporation of India was established with Eicher Tractor Company, a German tractor manufacturer. By 1960's, the company was fully owned by Indian shareholders.
In 1982, Eicher Motors Limited (EML) was incorporated, as an Indian automaker company. It is the flagship company of the Eicher Group. The company's story started with the production of India's first agricultural tractor in 1959.
The company is now a leading player in the Indian automotive industry. In 2008, the company signed for a 50-50 Joint Venture with the Volvo Group which is now known as VECV (Volvo Eicher Commercial Vehicles) which designs, manufactures, markets commercial vehicles & engineering components.
In 2012, Eicher Motors and Polaris Industries, US, announced a Joint Venture which designs, develops, manufacture and sell a full new range of personal vehicles.
The story does not end here!
Royal Enfield, the leisure bike manufacturing company, is also a subsidiary of the Eicher Group.
Who is Vikram Lal?
Vikram Lal, the former CEO of Eicher Motors, joined Eicher Motors in the 60's, when his father started the production of the first agricultural tractor in India.
In the 80's, Eicher Tractors, under Vikram Lal, was one of the leading tractor manufacturer in India. The success of this industry led to the business expansion, when in the 80's, Eicher announced a strategic Joint Venture with Mitsubishi Motors, Japan, for the design, manufacturing and sales of trucks and canters.
Later, in 2000, the company faced losses, and the conventional wisdom was to dispose off the Royal Enfield business. But, Siddhartha Lal, Vikram Lal's son, convinced his father to give him two years of "grace period" to turn the Royal Enfield business around.
So, Did Siddhartha Lal succeed?
Within 12 years, not only did he turn the Royal Enfield business around, but also restructured the group flagship, Eicher Motors, often going against the analyst and consultant wisdom.
In 2005, he decided to cut down the focus to a fewer businesses, namely commercial vehicles.
So, he decided to dispose off the garments, hand tool and a couple of other businesses.
Later in 2005, the Eicher Tractor business, also known as their "family silver", was sold to TAFE Tractors of Chennai, India.
In the year 2002, the Eicher Motors Stock Price was Rs. 24 per share.
Presently, the stock price of the same is Rs. 21,130 per share.
Not only did the company perform well in the share market, but the company also succeeded in the sales figures:
In 2005, Royal Enfield sold 25,000 bikes.
In 2014, it sold more than 3,00,000 units beating Harley Davidson which sold 2,67,999 units globally.
The Results:
In 2014, the Royal Enfield business made a record breaking income of $482 million and the company plans to manufacture more than 4,50,000 units this year.
As far as the VECV business is concerned, VECV is selling more than 40,000 units of commercial vehicles annually.On October 1st, 2015, VECV launched new line-up of commercial vehicles with Hybrid and AMT Tech, first of it's kind vehicles.
Siddhartha Lal now devotes 50% of his time on Royal Enfield business.
According to Forbes, Vikram Lal's current net worth is 4.6 Billion USD, which makes him the 20th richest person in India.
According to Business Outlook, Eicher Group is India's 37th most valuable company.
According to Business Outlook, Eicher Group is India's 37th most valuable company.
In 2014, the company reported an annual revenue of INR 85.98 Billion.
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