"Our bike capacity will move to 1 lakh by 2012"

Siddhartha Lal, biker, father and managing director of Eicher Motors, shares lunch and a tÍte-ŗ-tÍte with Forbes India

Published: Jan 8, 2010

My first meeting with Siddhartha Lal, managing director of Eicher Motors was at the Society of Indian Automobile Manufacturers (SIAM) summit in New Delhi last year. We had just introduced ourselves when a guy who apparently knew Lal bumped into him. After exchanging pleasantries, he pointed at Lal’s tummy and said, “Dude, look at you!”

“I know. I’m pregnant,” said Siddhartha and the guys burst into laughter. I immediately knew that I would enjoy talking to this guy. So this time when I bumped into Lal at the Auto Expo, we decided to catch up over lunch and talk about his biking days with Royal Enfield, life in college, work life balance and the ambition for his ‘baby’, Volvo Eicher Commercial vehicles. 

So still pregnant?
Well, the baby has come now. 

Really?
Yes, a real physical kid. Just had it a few months ago. It is my second kid. But, yes in corporate life also there have been new deliveries. One is Classic bike from the Royal Enfield side. And in CVs [commercial vehicles] here it is the VE series of vehicles which is from Eicher truck and bus and then of course the most powerful truck on Indian roads, the 520 horsepower truck. 

Any interesting bikes at this Expo?
I am very biased when it comes to these things so I am obviously very excited about my own stall, Royal Enfield, and I think I have not been so touched here. But, I like the KTM bikes of Bajaj which are good and that I thought was interesting. 

Siddhartha the biker or corporate?
I have my Royal Enfield jacket here [slung on the chair he is sitting in] and my suit on so that’s the biker and corporate. So I have to balance both and it’s good fun as they offer a different experience. My weekday, five days, are spent in the truck and bus business, that’s what I am after now because we have got Enfield off to a great position. Now it is a matter of executing what we have been doing for the last few years, so the basic thing is ramping up production and other things. That’s not my area of expertise really and there is a team which is doing that. So for the next three years — 2012 kind of horizon — we have a lot of co-ordinates set as far as Enfield is concerned. 

With trucks, we are making a huge push into the heavy duty segment and that’s really the biggest opportunity. It is already a 30,000 to 40,000 crore segment so we want to pick up a much bigger part of that. So currently we have only 2 percent of the heavy duty segment and we want to take that up to 15 percent, so that’s a huge ambition we have. 

Do you get time to bike anymore?
Yes, a little bit. I was in Chennai recently and I did it but it is not a daily event for me anymore; maybe once in a week that I am going on a ride kinds. 

What’s more exciting — St. Stephens or your office?
My god! I can’t even remember college life anymore. Of course, student life was a different life altogether. But now this is it. I guess, I won’t even be able to make it as a full time student anymore. 

Working long hours or taking it easy?
Well, long hours when required and short hours when not needed. You have to have a work life balance so when you are needed at work you have to be there. Every day is different. I have just come back from a vacation for a week. We have a professional organisation and nothing is going to stop if one takes a few days off. But, of course, there is a lot of work to do now in the heavy duty space so I’m needed here. 

How has the shift been from Royal Enfield to commercial vehicles?
Well, as Eicher we have been in the truck business for 25 years and we have been in the motorcycle business for only 15+ years. So to put it this way, biking is personal transportation which is leisure so it is a lot easy to relate to that and do that as well. I do that and I enjoy it. Trucking is like you are actually selling an asset to a road transporter which is a B2B business, so it is a very different business altogether, but over the last few years I have got more and more in-depth into it. 

More than just the personal involvement which is, of course, more than a motorcycle, here it is the personal challenge that I have taken up. We have taken a challenge to become a strong player in the heavy duty segment, so that challenge is very exciting. We were clear more than five six years ago that we are going to become a full range CV player and heavy duty will be our segment. Actually with that perspective we got into the JV with Volvo. So, in order to realise that dream, we felt that we need some support from a global player in a lot of areas like technology, export markets among others.

We felt that while we may be able to do it alone, it carries a high level of risk and would take some time. That’s why we got into this JV. Today we have as much capital at our disposal as we want. I believe that we have the strongest balance sheet in commercial vehicles today. VE commercial vehicles has Rs. 1,000 crore of surplus cash available today and we have very low level of debt. Volvo is a technology leader in the world so we have every technology in the world at our disposal today. So now it is just a matter of putting the right things together and making it happen. 

How are you going to differentiate yourself from your competitors?
Personally, I see a lot of space for new players. The technology and the standards are moving up. So in the truck and bus area, what was happening for the last 50 years is not going to happen for the next 15 years. Things are going to change, which means that there is space for new players to come in. If it was the same then it becomes very difficult to break through. Now roads and infrastructure is coming in, there are more demanding customers. In any market you can expect four to five strong players in the commercial vehicles space as what happened in India that in the heavy vehicles space there were just two players. 

What can we look forward to in 2010 for both your businesses?
I am very bullish about this year. Two wheelers — it is very simple because there are two-three things that we have to accomplish. From a sales and revenue perspective, we are already covered for 2010 from the two wheelers business. We have more demand than supply, we are ramping up capacity. We are incrementally adding to capacity. So from currently 50,000 we will move to 1,00,000 by 2012. On the other side, we have a lot of development work going on like the Café Racer concept, among others. On the third side, the emission norms are changing. So for us it means that our entire old platform is going to be replaced by our unit construction engine, which is our new platform. So it is a big change and a lot of work is being done to make it smooth. 

On the VE Commercial vehicles side, my only perspective is how we sort out the game in the heavy vehicles side. That’s where all the work is happening. So that’s really the challenge. Which is, how do we get from current levels selling 300 units to 1,000 units by 2011. So that’s really the task ahead in manufacturing, selling, customer and network. Exciting stuff, but let’s see, because you know life is a lot of work in progress and you have to keep moving to the next level.

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