Eicher Motors Limited Global Fund Managers Meet Singapore& Hong Kong August 2005 Organised by ICICI Securities.

Eicher Motors Limited

Global Fund Managers MeetSingapore& Hong Kong

August 2005

Organised by ICICI Securities


Presentation Agenda

• Eicher Group Business Portfolio• Industry Outlook , Opportunities and EML

Performance.• Product range• Financials FY 05• Significant events in FY 05


Business PortfolioToday

A diversified business group with sales of over Rs. 20 bn ($ 450 m) engaged in :

• Commercial Vehicles• Motorcycles• Automotive Gears and Components. • Engineering Solutions• Global Sourcing• Merchant Exports• Maps and Guides• Management Consulting

Eicher Motors Ltd also has a wholly owned subsidiary Design Intent Engineering in Michigan, US. This company specializes in surface modeling for Engineering solutions and provides computer aided design services to tier1 and tier 2 OEMs.


FacilitiesToday

• 3 manufacturing facilities– vendor base of 400

– 2350 Workforce.

• 7 Regional marketing offices in India– 300 strong dealer network

• 3 International marketing offices


Automotive Businesses


Commercial Vehicles• Established in 1986 in collaboration with Mitsubishi Motors Japan and one of the leading manufacturers of commercial vehicles in India.

• Product range includes 5ton, 7 ton, 9 ton, 11 ton, 16 ton & 25 ton GVW categories trucks ; bus range includes City buses, School bus, luxury coach• Ready-To-Use application vehicles - Around 85 RTU built vehicles to suit a diverse range of applications.

• Manufacturing plant equipped with state-of-art facilities

• Stringent quality control norms - practices like Kaizen, Just-in-time, TQM and TQC etc.


Motorcycles- Royal Enfield

• Has a rich heritage of around 50 years in the Indian motorcycle industry.

• The only British bike manufactured anywhere in the world.

• Product range includes : The Bullet 350cc; The Bullet 500cc; The Bullet Machismo; The Thunderbird; The 2004 Electra

• Plant capacity to manufacture 32,000 bikes per annum.

• DET NORKSKE VERITAS Quality Management System Certificate awarded to Royal Enfield Motors Limited


• Set up in 1964, in technical collaboration with Fratelli Daldi & Mattueucci of Italy

• Product range includes : Spiral & Hypoid gears ; Straight bevel gears ; Spur & Helical gears ; Camshafts ; Precision Machined components ; Machined housings• Bagged National Productivity Council Awards

• Plant certified for QS 9000 since 1998

Gears & Components -Eicher Demm


•Uniquely poised with its experience in the automotive area to ideate, design and deliver virtual and physical prototypes and products.

• Offers a wide spectrum of services in the area of CAD, CAM, CAE, PDM and Customization.

• Delivers turnkey projects on design and development, providing high quality, rapid time-to-market solutions.

• Executes engineering projects and is capable of delivering solutions to automotive, aerospace, heavy engineering, consumer durables, power generation and other segments

•Provides end to end solutions from design to sourcing

Eicher Engineering Solutions


Maps & Travel Guides

• Set up as part of Eicher’s corporate initiatives

• Maps and guides compiled by a team of

professionals considered best in their field

• Maps currently cover Delhi, Mumbai, Chennai,

Bangalore and Kolkata.

• Travel Guides include guides on : Delhi, Sikkim,

Varanasi, Hampi , Buddhist pilgrimages in India

and World Cultural Heritage sites in India.


Digital Mapping & GIS Solutions• The division was formalised in Dec 2000, with the Ministry

of Defence, Government of India, according approval to Eicher for licensing the digital maps of Delhi and satellite towns.

• Provides solutions in the areas of :– Spatial Data– E-Mapper– E-Router– GIS applications– Web GIS

• Offers GIS products and services that cater to a wide spectrum of applications in the corporate, and in the infrastructure development segments


Management Consulting• Formed in 1991

• A 50 : 50 Joint Venture between Eicher & Strategic Decisions Group of USA

• Uniquely positioned in terms of:– Collaborative Consulting– Knowledge of Indian Market– Service– International Standards

• Practice Areas : HR & Change Management ; Strategy ; Operations, Quality Management incl. 6 Sigma, Supply Chain, Full Value Sourcing etc.


• Implemented SAP in most of its Business units. Eicher’s SAP

Solutions Group (SSG) is India’s first (sixth in Asia Pacific)

SAP certified Customer Competence Centre

• Business Today- One of the 13 Best Managed Companies- Feb 2005

• Outlook Money- Best Mid- Cap company- Feb 2004

• Successfully deployed several collaborative software tools for

its various processes across locations for faster turnaround

time for products, services and speedier functions. Winner of

the Seagate Intelligent Enterprise Award and NASSCOM*

IT User Award’ 2004

EICHER GROUP- Awards

SAP Certificate

Seagate Award

Nasscom IT User Award

* National Association of Software and Service Companies


Industry Outlook and Opportunities


CV MarketThe Markets in which we operate in India

• Trucks & Buses– Large market : 350,000 units p.a.

– High long term growth potential as investments in highway and road infrastructure are made and the GDP grows @ 5-7% p.a.

– 6 local and 2 global players (Volvo and Tatra)

– Range from 1 ton to 40 ton Gross Vehicle Weight

– Eicher – strong presence in the light and medium truck / bus (7-11 Ton) segment and has a market share of 30%.

– Recently made an entry into the heavy (> 16 T GVW) truck & bus segments.


Motorcycle MarketThe Markets in which we operate in India

• Motorcycles– Second Largest 2 -wheeler auto market in the world : 4

million motorcycles, scooters and mopeds p.a.

– Motorcycles account for two-thirds (2.64 million) and growing at over 25% p.a.

– 3 global players (Honda, Yamaha & Suzuki) and 5 local players (3 in part alliance with Kawasaki, Hyosung & Daelim).

– Range from 100 cc to 350 cc

– Eicher present in the top end niche of power bikes with its well known Royal Enfield brand.


Grew 25.5 % in 04-05 fuelled by:

- Good GDP growth of 6 ~ 6.5 %

- Low interest rates , but firming up

- Continued Govt. commitment on Road & Infra development

- Increasing awareness on phasing out of old vehicles

- Easy credit availability

COMMERCIAL VEHICLE INDUSTRY GROWTH


- Implementation of tighter emission and safety norms

- Fuel Price hike

- Steel price hike & input costs.

- Entry of MNCs

INDUSTRY CHALLENGES

Eicher Motors -CV Growth


1

-13

30 2522

-12

14

-1

3227

25

37

45

26

-20

-10

0

10

20

30

40

50

98-99 99-00 00-01 01-02 02-03 03-04 04-05EML GROWTH IND GROWTH

EICHER MOTORS % GROWTH AS COMPARED TO INDUSTRY


EICHER MOTORS CV SALES OVER THE YEARS

1087

3146

4494 4471 48374114

3001 3370

48615875

6579

5275 5321

6931

8438

9630

12717

15885

23004

0

5000

10000

15000

20000

25000

86-87 87-88 88-89 89-90 90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05


Industry growthIndustry growth

• Rapid growth in 7-11T

• Passenger segment to

boom

• Shift from 16T to 25T

• Rapid growth in 7-11T

• Passenger segment to

boom

• Shift from 16T to 25T

EML's product strengthEML's product strength

• Reputation for higher quality / better economics

• Good response to HCV- speed advantage to benefit from road infrastructure

• Strong in 7-11T

• Reputation for higher quality / better economics

• Good response to HCV- speed advantage to benefit from road infrastructure

• Strong in 7-11T

Discontinuity in marketDiscontinuity in market

• Emission norms would force upgrade

• Overloading likely to go

• Built up trucks and buses to become the norm

• Increasing focus on life cycle economics

• Emission norms would force upgrade

• Overloading likely to go

• Built up trucks and buses to become the norm

• Increasing focus on life cycle economics

Growth in 7-11T

Opportunity in new segments• HCV, Passenger

Global opportunity• Global norms met

Growth in 7-11T

Opportunity in new segments• HCV, Passenger

Global opportunity• Global norms met

FUTURE OPPORTUNITY IN MARKET –OUR POSITION


• Customer engagement enhancement workshops conducted at dealerships.

• Fleet Management Software available.

• Works manager conference regularly held across locations.

•Over 900 ASP and 4000 trained mechanics across India

MARKET INITIATIVES


•Improvement in customer and dealer engagement levels. Reach the Customers – Target Fastest Service Response

• Vehicle Delivery Quality enhancement

• Nurturing Trained Private Mechanics through Dealership Salesmen

MARKET INITIATIVES


Product Range


Commercial VehiclesOur product range : Some of our Trucks

Eicher 10.50 Eicher 10.59 Eicher 10.75

Eicher 10.90 Eicher 11.10 Eicher 20.16


Some of our international offerings

• Eicher 11.10 11 Ton GVW


• Eicher 10.70 / 10.60 G 7 / 6 Ton GVW


Commercial Vehicles


Passenger Buses

Cruiser

Skyline

Skyline CNG

Our product range : Buses

School Bus


Royal Enfield

Our product range : Motorcycles

Bullet 350cc

Bullet Machismo

Bullet 500

Thunderbird

The 2004 Electra


• Our product range : Gears

Eicher Demm

EML Performance 045


Performance FY 05

FY 05 FY 04(Rs crs) (Rs crs)

Gross Revenue 2211.58 1564.75Revenue (Net of excise) 1982.56 1364.70Other Income 18.31 11.40Total Income 2000.87 1376.10

EBDIT 150.86 131.40

EBDIT Margin 7.6% 9.6%

Interest 22.33 23.97Depreciation 48.37 42.28

PBT before VRS amortisation 80.16 65.15PBT 73.50 57.56

Net profit after Tax 58.85 33.62

Basic EPS (Rs) (non annualised) 20.95 11.97


Profit before Tax (Rs Crores)

73.50

57.56

42.09

11.12

0

10

20

30

40

50

60

70

80

FY02 FY03 FY04 FY05

Rs C

ro

res

EICHER MOTORS FINANCIALS


Net sales (Rs Crores)

1982.56

1364.70

1158.411029.90

0

500

1000

1500

2000

2500

FY02 FY03 FY04 FY05

Rs

Cro

res

GROWTH IN SALES OVER THE YEARS

DATA REGROUPED


MAJOR EVENTS IN EML

• During Q1 of FY 06 the Tractors, Gears and Engine Division were sold on slump basis to TAFE Motors and Tractors ltd at a consideration of Rs 310 crs. The net profit on this sale was Rs 182.12 crs.

• EML during Q1 acquired 100% of the shares of Design Intent Engineering Inc ,USA. This company is engaged in the business of providing computer aided engineering and design services to tier 1 and 2 suppliers of OEMs.


Eicher Motors Limited Global Fund Managers Meet Singapore& Hong Kong August 2005 Organised by ICICI Securities.

Documents

eicher motors limited

eicher engineering solutions

mitsubishi motors japan

market solutions

icici securities slide

automotive gears

engineering projects

diversified business