It is like a small fish chasing the sharks. Delhi-based light and medium truck maker Eicher Motors (FY2007 revenues Rs 1,953 crore) is looking to grow out of its Rs 6,000-crore nick of the market. It wants to enter the forbidding, yet lucrative, Rs 30,000-crore heavy trucks market, an exclusive preserve of Tata Motors and Ashok Leyland. Eicher is a quarter of the size of Ashok Leyland and less than one-tenth that of Tata Motors. But necessity is the mother of bravery.
Eicher’s staple market is stagnating, while that for heavy vehicles is booming. The 33-year old, Bullet-riding CEO of the company, Siddharth Lal, knows the enormity of his ambition. He says, “We believe we can do what nobody else has been able to achieve in the past five decades.” That is, to prise open the heavy commercial vehicles market from the two giants. He is even willing to sell a piece of his company to anyone who can help him.

In the past few months, Lal has received feelers from many companies to buy a strategic stake in Eicher Motors, where his family and associates hold 58 per cent of equity. But Lal dismisses the reports of him wanting to sell majority stake in the company as grossly exaggerated. He insists Eicher is looking to expand rather than get swallowed. In July, he received the board of directors’ nod to evaluate offers. Since then, reports of the company’s possible acquisition by the Hyundai and Daimler groups have emerged and have been denied, too.

Lal came to be seen as a seller after he sold Eicher Motors’ profitable tractors business in 2005 for Rs 310 crore to the Chennai-based TAFE Group. Also, in 2006, the Eicher board resolved to separate the Royal Enfield motorcycles division, if a partner could be found.

Manufacturing trucks and buses is central to Eicher’s business. During the 2006-07 financial year, 85 per cent of the company’s Rs 1,953-crore revenue and 98 per cent of its Rs 87-crore operating profit came from commercial vehicle sales. Still, Eicher finds itself playing in the dullest part of the commercial vehicles market and it must either go up the weight category or down to stay relevant. Up is the way, according to Lal.