Eicher to focus on CVs

New Delhi, Feb 25 | Updated: Feb 26 2005, 06:27am hrs
If the proposed divestment goes through, Eicher Motors will be left with the CV and motorcycles business, along with Eicher Engineering Services. We want to focus on the commercial vehicles business where we expect significant growth in the coming years. This sell-off will help us streamline our business operations, Eicher Group CEO S Sandilya told FE.

Eicher is one of the smallest players in the tractor market with only a 10% market share. The industry is likely to witness consolidation with private equity firms like Actis acquiring a stake in Punjab Tractors.

Moreover, Eicher needs to raise capital for increasing its capacity in commercial vehicles. We are still evaluating the proposal, he said when pressed for further details on the value of the businesses.

Sources say the company is betting on commercial vehicles as a growth engine targeting doubling of sales to 50,000 units by 2007-08. This calls for increasing installed capacity from the current 20,000 units per annum.

For the ten-month period ended January 2005, Eicher sold 11,392 vehicles in the M&HCV segment, which represented a 7.2% market share.