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Eicher poised to challenge the position of Ashok Leyland

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Riding on their successful joint venture with Volvo Group in India, Eicher has posted impressive growth in the domestic M&HCV market in the recent past on the back of vastly improved / upgraded models with the help of Volvo’s technological prowess. The JV has also invested significantly on exclusive engine plant & Bus Body plant to further enhance their capabilities. While Ashok Leyland growth has been stagnant for sometimes with only a handful of new launches which are far & few in a scenario where the market is gradually maturing towards high tech & high power products. The graph below illustrates the closing gap between the two brands in the domestic >3.5T GVW CV Industry


Eicher Strengths:

  • Dominant position in ICV segment
  • Range of Variants suitable for various applications
  • Huge investment in product development/up gradation in HCV range
  • Support of Volvo’s global technical expertise in manufacturing & product development
  • Growing network reach
  • Continuous product upgrades/innovations

Current Product Portfolio: Truck

With the current product position, Eicher does not have the product range for entire segments. ACG believes that for VECV to become number 2 in Indian CV market, they need to launch complete product range which fits in every segment and application. VECV is having brand Eicher for mass market and Volvo for niche market but are not present in the budget segment. Recent surveys by ACG indicates that customer purchasing behavior is slowly shifting towards the budget segment. This gap can be filled by the introduction of  UD Trucks which is one of the most successful brand in Asia.

Around 75% of global UD sales is coming from Asia region because this product is well accepted in Asian markets.

Current Product Portfolio: Bus

Eicher is having range from 18 to 65 seaters bus for variuos application. They also range of chassis in different GVW options of 5T-16T from 5 Metre – 11 Metre overall length.

VECV Medium Term Plan 

VECV’s objective is to touch 100,000 units by 2015 (including exports). However considering the current market sentiments, ACG believe that a realistic possibility to achieve this milestone will be by 2020, provided they renew their entire Eicher range to take on looming competition from the likes of Bharat Benz, TML Ultra series etc. & plug the gaps in the product portfolio. It would be interesting to see how Ashok Leyland will gear up to face this new challenge.

  • Sales Target: By 2015 touch 100,000 units
  • Covering complete product range
  • Extensive network coverage

Eicher has good growth potential in HCV segment. To explore this Eicher need to cover the segment with an appropriate product mix. This will further enable them to focus on export markets specially Africa, South Asia and Middle East along with Volvo.

VECV with  local market expertise of Eicher and Volvo's technical expertise  are currently developing a new Engine platform for global market in Medium Duty Engines (5 litre and 8 litre) for Volvo Group, same engine platform being adapted for Euro 3 and Euro 4 needs for VECV as well as Volvo Group. Further more a new plant for bus body  manufacturing is being set up at Pithampur.

This Article is Compiled by ACG Analysis Team and is a part of 'OEM Sales Strategy Analysis'

To Purchase full report, Contact – sales@autobei.com

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Comments

  1. antony j a says:

    This is a very good analysis and interesting input for cv industry dependents.

  2. McKumar says:

    Handy info

  3. Too good compilation.Which area do you think Eicher need to focus on?

  4. so nice

  5. Rajesh Kumar Agrawal says:

    This is a very good report indeed. Would it be possible to have some detail on the product segments on which VECV is ahead from AL?

  6. very good analysis and very valuable information

  7. Manish bharatiya says:

    Nice report. CV industry in India is set to evolve in years to come with more new products and new competition. Surely new competitors like VECV are set to challenge the dominant players in the industry. The key to success would reliable product, extensive network and good service. Reducing the total cost of ownership for the customer will be the key.

  8. Nirmal Kumar Piriya,Eicher says:

    Very good reports. VECV has good growth in HD segment.

    Nirmal Kumar Piriya, Eicher

  9. M V Sridhar says:

    very good analysis & valuable information for cv industry dependents, interesting to see the M & HCV segments growth as CV makers fighting each other on holding to market share
    M V Sridhar
    AMW Infra Automotive Sales Bangalore

  10. Ramkumar says:

    Hello!
    Interesting analysis. Going little deeper and comparing the product portfolio of VECV & AL with CV market trend, the ratio of Eicher to AL sales does not provide a clear indication that Eicher is poised to catchup with AL. The reason is that Eicher is dominant in LCV where AL has just started to show its presence. The area where AL has dominancy over Eicher is in M&HCV which has shown decline continuously vis-a-vis LCV. Though analysis seems to be a good start in understanding the ups in Eicher, I see the analysis is incomplete and not conclusive.

    • Dear Ramkumar,

      The article clearly explains strength and weakness of both players. Conclusion is also given as an overview. Let me know what you haven’t understand.

      Regards,
      Arun

      • Hello Arun!
        There are many factors to be considered before a conclusion can be made in reference to the Eicher poising up with likes of AL. For example, what is the base line for comparison. You started comparison with VECV having advantage of Volvo technology. But, AL also has taken an edge with thier Nissan JV in LCV segment. With stagnation or marginal increas in industry volumes for LCV segment and surge decline in M&HCV segment (except busses), the comparison is incomplete. Hence, I said this analysis is a very good start point, but unconclusive.

  11. Ajay R Kshirsagar says:

    That’s great comparison. I wish if we can have all the commercial vehicle manufacturers(include TATA, SML, M&M, BB) comparison. I too see Eicher having good opportunity to come up at the position marked by you.

  12. Jitendra Yadav says:

    Defenetly they are….
    Jitendra Yadav , VECV

  13. Vikram Shende, Foton Motors says:

    Good analysis

  14. Adhishakthi says:

    No, we are also launched world class quality products like “BOSS”.

    Adhishakthi Krishnapillai
    Vehicle systems(Suspension systems)
    Ashok Leyland

  15. P P Deshmukh says:

    The Eicher poised to challenge the position of AL is true and further it also dent to the Tata motor too,so the Al and Tata needs timely correction to lead the market.

    P P Deshmukh

  16. Yogesh Ramaswamy says:

    Just a point to note , all the Pro series from VECV is- is only a de-rated version of Nissan UD platform – which they have tried to indigenize for Indian market . in fact the opposite of your suggestion is actually true…Eicher has been sort of safe as long it was focused and market leader in the 7 to 15 ton segment which primarily carried rated loads only . The M & HCV segment is habitually prone to abuse loading in India . Bharat benz has tried this de-rated methodology of its Axor platform from Turkey/Brazil – those of in the know – already know that they(BB) are suffering from several severe failures in aggregates given the phenomenal abuse which Indian end users are known to give their vehicles. VECV is also going down the same line of thinking now .The foreign OEM’s are making the fatal mistake of trying to transplant their other existing / platform models into India without accounting for the peculiar idiosyncrasies of this market( reminds me of an TV ad tag line ” Sorry , we are like this only, Kindly adjust !! :-) :-) ) – Even the Americans with all thier technology & firepower – did get thoroughly thrashed in Vietnam..

    Yogesh Ramaswamy

    Manager, Product Development,
    Ashok Leyland
    Ashok Leyland Technical Centre

  17. I can decide only after practical experience

  18. Adhishakthi says:

    No we are also launched world class quality products like “BOSS”

    Adhishakthi Krishnapillai
    Vehicle systems(Suspension systems)
    Ashok LEYLAND

  19. Rajesh Agrawal says:

    Analysis is Good, beyond any doubt , It would also be interested further to note the changes in terms of Total Volume for top 3 or 4 Companies and in product group wise details. Since Market is taking new shape ever since last 3-4 years for entire CV range(SCV,LCV,MCV,HCV-Cargo and Constrn) and it is keep on changing with introduction of specialized application vehicles along with Network addition by Top Companies.

  20. Manishkumar Deoli says:

    Yeah,,with Volvo Technological strength backing them , Eicher surely be treat even to Tata’s.
    although Ashok Leyland also has huge inventory of product waiting to be launched in market.

    Manishkumar Deoli
    Manager
    Mahindra & Mahindra Ltd

    • Arthanareeswaran says:

      No, Ashok Leyland lined up many product which is more cost effective with High reliability.

      Arthanareeswaran Balasubramanian
      MANAGER (Lead TRIMS Designs)
      Ashok Leyland

  21. RAJEEV RANJAN TIWARI says:

    One more feather in the heart is their driver training system which works for producing alive products in the form of well trained; safe and fuel efficient driver as they know the man behind the machine can do wonders.

    RAJEEV RANJAN TIWARI
    Driver Competence Development Incharge VE Commercial Vehicles Limited (A Volvo Group and Eicher Motors Joint Venture)

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