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Eicher Motors Ltd.

JOINT INVESTORS MEET


March 28th, 2012 | Pithampur

Siddhartha Lal
MD & CEO, Eicher Motors Ltd.
Investor Presentation

In this Presentation

1.

Eicher Motors Limited

Journey so far
EML: Overview 2. Royal Enfield

3.
4.

VE Commercial Vehicles Limited


Financials

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Eicher Motors Limited Journey so far

Indias first tractor rolls out of Eicher factory in Faridabad

Forms JV with AB

Royal Enfield
motorcycles acquired

Enters HD trucks segment

Volvo of Sweden;
transfers CV business to the JV

1959

1984
JV with Mitsubishi Motors to make Canter trucks

1991

1993
JV with Mitsubishi ended, enters MD bus segment

2002

2005
Divests tractor and allied businesses to focus on CV and motorcycle businesses

2008

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Eicher Motors Limited Overview


Retail Investors
11.5%

Institutional Investors
24.9%

AB Volvo
8.4% 55.2%

Promoter Group

45.6%

EML
54.4%

VE Commercial Vehicles Ltd.

Royal Enfield

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Eicher Management Philosophy


Break-through Market Business Model
An evolved business model with 50+ years of experience in automotive space in India, that: In-depth customer insights and market understanding Best-in-class Capital Optimization: Frugal engineering practices Extensive knowledge of suppliers Operational Excellence Global Quality Standards

Established Corporate Governance


Fully empowered management teams Regular board meetings, every two months - full review with management Strategic quarterly reviews and regular monthly operations review Product board, Quality board, Customer Satisfaction board, Soft products board (aftermarket) held every quarter along with other statutory meetings

Strong Values
Corporate conduct rooted in highest standards of ethics, integrity and transparency Highly professional work ethic based on mutual respect Very strong HR and IR culture and brand Long-term orientation Long history of institutionalized CSR and community activities

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Established Governance Structure: EML Board

S Sandilya Non Executive Chairman

Siddhartha Lal Managing Director & CEO

MJ Subbaiah Independent Director

R L Ravichandran Executive Director

Priya Brat Independent Director

Prateek Jalan Independent Director

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Moving forward...

ROYAL ENFIELD

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Royal Enfield
Royal Enfield Bullet is the longest running model in continuous production. Royal Enfield Motorcycles are unique in terms of the engine character - Single Cylinder, Air-Cooled, Push-rod &Valve operated for the distinctive Bullet beat. The authentic vintage styling , traditional paint schemes, 1950s style, nacelle and toolboxes contribute to its distinctive classic appeal.

1901: Royal Enfield rolls out its first Motor Cycle 1955: Enfield India is incorporated.

1994: Eicher Motors acquires Enfield India Ltd.


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After successfully managing 2010, the year of transition, Royal Enfield continues to grow and evolve
80000 70000

Sales Volume(units)

60000 50000

Introduced UCE engine in Bullets export model & launched Classic 500 with UCE

Transition of all models to UCE platform; Surge in demand

41.9

45 40 35 30 25 20 15 10 5 0
Sales Volume (units)

Demand continues to be ahead of capacity; optimising production in TVT; commencement of capacity expansion at new site in Oragadam

Growth (*%)

40000 30000
20000 10000 0

17.7 12.7 5.5 4.1 2003 1.7 2004 2005 2006 2007 2008 7.2

20.0

Sales Volume Growth (%)

1.2 2009 2010 2011

20000 15000
10606

40.2 14871

50 40

10000 5000 0
YTD Feb '11 YTD Feb'12

30
20 10 0

Bullet
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Thunderbird

Classic

8 27

Growth (%)

Uniquely differentiated offering

Rich Heritage Market Trading Up


Upper end segment, less price sensitive, growing

Enhanced Product
Removed perceptual & physical purchase barriers

Practical Leisure Motorcycling

Sold as a leisure bike; bought as a practical bike


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Thriving in Community: Both physical & virtual

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Plans being executed for profitable growth


Enhance production capacity
Enhance production for CY 2012 to 1,00,000 units; Capacity increase to 150, 000 pa after start of commercial production from new site at Oragadam, Chennai, India from 1st half, 2013

Improve profitability
Focus on cost management Exploit significant opportunities after market

New product launches


Thunderbird 500 launch planned in Q2, 2012 Caf Racer to be launched in Q1, 2013 Accessories launch planned in Q2, 2012

Distribution and after market footprint


Increase reach in India and global markets Currently, there are 175 distribution and after market points in India. Exports to more than 30 countries
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Future: Caf Racer

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Moving forward...

VE COMMERCIAL VEHICLES Ltd. (VECV)

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VECV was established in 2008 with strong parentage

Eicher strengths
VECV vision

Volvo strengths

Leadership in LD / MD segments Specialist skills and experience in developing low cost, better performance products Wide dealer network After sales infrastructure for LD / MD Cost effective operations

To be recognised as the industry leader driving modernisation in commercial transportation in India and the Volvo demerged Eicher transferred its CV,developing Volvo Truck Indias world components and engineering
solutions businesses into VECV

Global expertise Leadership in product technology Good infrastructure facilities Well-defined processes and controls Brand image and customer relationships

sales & distribution business from Volvo India Pvt Ltd.

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VECV milestones
Dec 2007: Signing of Letter of intent May 2008: Signing of definitive agreements Jul Aug 2008: Commencement of JV Dec 2008: Volvo Board Visit Mar 2009: Launch of Quality Improvement CSI-1 Initiative April 2009: Inauguration of the new gear plant at Dewas Jan 2010: Launch of VE-series of Eicher HD trucks June 2010: Launch of MDE Project October 2010: Groundbreaking ceremony of MDEP plant site February 2012: Groundbreaking ceremony of Eicher Bus manufacturing plant site at Dhar, Madhya Pradesh

May 2008: Signing of definitive agreements

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VECV Overview

Eicher Trucks & Buses

Volvo Trucks India

Eicher Engineering Components

Eicher Engineering Solutions

Medium Duty Engine Project

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VECV - Wanted position in 2015

Wanted position 2015: Strategic


Most innovative products covering entire range Comprehensive network Proactive solution / service provider Lean organization
Sales in units

Wanted position 2015: Operations


Market share (2015)

Seen as a leading CV group in India

Bus 100,000 LD/MD HD

100,000
including 11000 exports

80,000 60,000

17,500

16%

38181
inclusive of 2717 exports

36,400

35%

Recognized competitive advantages

Best fuel economy Reliable products Superior service quality Safety and comfort setting industry standards

40,000 4819 20,000 0 26425 4219 2010 2015 44,000


15%

"Best of both" company culture

Culture incorporating best of Eicher values and Volvo Way Professionalism, honesty, people caring to attract best talents in industry

Long term operating margin target >8% over a business cycle Customer satisfaction to reach >80%

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Moving forward...

FINANCIALS

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EML Consolidated: Optimising returns on capital employed and effective cash management
Return on operating capital employed (%)
140 120 100 80 60 40 20 0 CY09 CY10 CY11

Net Sales/Net Fixed Assets


12.0

125.0

10.0
10.0

8.4 7.1

77.0 56.1

8.0 6.0 4.0

2.0
0.0 CY09 CY10 CY11

Shareholders fund - Eicher Motors Net sales


60,000 50,000 40,000 12500 30,000 20,000 29,386 -1200

Working Capital (excl cash)


56,775

In INR Million -400 15000

Shareholders funds - AB Volvo


14476

In INR Million

(563)
43,971 -800

10000 9250

11936 10347

8832

8500 7750 7000 6250

(1,289)

-1600 10,000
CY09 CY10 CY11

10000

7160 6090
CY09 CY10 CY11

(1,815)
-2000 7500

5500

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THANK YOU

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