Industry Overview:

The Indian auto industry is one of the largest in the world. The industry
accounts for 7.1 per cent of the country's Gross Domestic Product (GDP).
Commercial vehicle sales, which comprise medium and heavy commercial
vehicles (M&HCVs) and light commercial vehicles (LCVs) in calendar year
2015 grew to 7.37 percent to 650,993 units (2014: 606,255 units). This
growth is mainly thanks to the sterling 30.03 percent growth achieved by
the M&HCV sector, which sold 280,388 units in 2015 (2014: 215,634). The
sector's performance helped reduce the overall impact of the LCV
segment, whose sales fell by 4.72 percent. While good times have still to
arrive for LCV manufacturers, it is important to note that the rate of sales
decline has slowed down substantially. Home-grown players like Tata
Motors (44 % market share currently) and Ashok Leyland (18% market
share currently) have dominated the market for the past decade and
more. The same decade has also seen premium European players like
MAN Truck, Daimler Trucks, Scania and Volvo enter the Indian market.
Mahindra & Mahindra, as a result of its outstanding performance in the
small commercial vehicle and pick-up segment, has become the second
largest player with a market share of 24 percent in the overall CV
segment. During CY2015, the company sold a total of 158,588 units
against 160,042 units in 2014.
Ashok Leyland, which sold 117,751 units in 2015 as compared to 83,834
units in 2014, recorded strong 40 percent growth. During CY15 the
company has registered tremendous double-digit growth in the Medium
and Heavy commercial segment (M&HCV).
VE Commercial vehicle increased its sales by 18 percent, selling 40,411
units. Clearly, the Eicher Pro Series of trucks is given a new fillip to the
company's sales.
Force Motors registered 12 percent growth, selling 22,419 units against
19,990 units in 2014.
While most CV manufacturers saw sales growth in 2015, Piaggio Motors
and AMW Motors saw their sales decline by 21 percent and 55 percent
respectively. They will be looking to re-invent their growth strategy in
2016.

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Looking Ahead
With Q4 of the fiscal year 2015-16 underway, automakers will be looking
to drive gains. However, there are challenges to be faced, even as poor
demand from the agricultural sector has kept growth in check. Indias
Index of Industrial Production (IIP) for November 2015 contracted 3.2
percent compared to 9.8 percent growth in October. Also, the ongoing
diesel ban in the Delhi-NCR region will be dampener on sales, at least till
March 2016.

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Company overview:

VE Commercial Vehicles Limited is a joint venture between the Volvo

Group (Volvo) and Eicher Motors Limited (EML). It is a partnership that
brings together Global leadership in technology, quality, safety and
environmental care, along with the deep knowledge and understanding of
the Indian Commercial Vehicle (CV) market. VE Commercial Vehicles
Limited. (VECV) owes its inception to the compelling intent of driving
modernization in commercial transportation, in India and other developing
markets.

Key Facts:

VE Commercial Vehicles Limited (VECV) is a joint venture between the

Volvo Group and Eicher Motors Limited, and is headquartered at New
Delhi. This joint venture came into existence in July 2008.

ETB, completed 30 years of operations in India in the month of June

2016. The first Eicher truck was rolled out from its manufacturing plant
in Pithampur, Madhya Pradesh in 1986 and over the past 29 years, the
products have got endorsement from happy customers of over 400,000
vehicles.

Eicher Trucks and Buses (ETB) is present in the 5T-49T truck segment.
Eicher's 15-65 seater buses have a growing presence in the LD school
bus, staff and route-permit segments. ETB has also made strong
inroads into heavy-duty trucks segment of 16T-49T with their "VE"
series of Fuel Efficient heavy-duty trucks, and the next generation
Eicher Pro Series of heavy Duty Trucks.

Eicher unveiled its entire new range of future generation trucks and
buses at an impressive product reveal function in Pithampur on
December 2, 2013. The all new product range has been named the
"Eicher Pro'' series. Adopting the most professional and holistic
approach to modernise the Indian trucking industry, the new brand
philosophy is to "Go Pro"; that is to give Indian trucking a truly
professional offering which will lead to higher productivity, profitability
and prosperity for the customer. Eicher's new Pro series trucks and
buses promise to deliver best-in-class fuel efficiency, higher loading
capacity, higher superior uptime and overall vehicle life time
profitability.

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 The state-of-the-art plant in Pithampur has top line manufacturing
processes which includes cab weld shop with robotic welding, CED
paint shop, integrated testing facilities, 100% hot test facility for
engines and a lean and scalable manufacturing set up. It offers
superior paint finish and deliver quality much superior to what we see
in contemporary trucks in India. The top coat paint finish is superior in
terms of gloss, distinctness of image and corrosion resistance. Even UV
protection will be two times more than the existing paint quality. The
paint shop will have an initial capacity of 72,000 units scalable to
100,000 units per annum.
Volvo Trucks in India is the first truck manufacturer to introduce the
European design, high performance trucks with the latest technologies.
To provide an all-round solution Volvo Trucks in India pioneered the
Driver Training concept in commercial vehicles segment. Today, there
are over 30,000 drivers trained by Volvo, operating Volvo vehicles
across the country for private as well as public transports. When it
comes to maintaining a Volvo Truck as a true Volvo, Genuine Volvo
Parts helps the truck retains its original properties throughout its
lifetime. Complementing the trucks, Volvo Trucks offers a wide range of
Service Agreements to help customers plan the maintenance.

Commemorating the successful completion of 5 years of partnership

between Volvo Group and Eicher Motors in July 2013, VE Commercial
Vehicles Limited announced start of commercial production at the
technologically most advanced engine manufacturing plant in India.
The plant has been set up at Pithampur, Madhya Pradesh, India with an
initial capacity of 25,000 units per annum in Phase 1 at an investment
of Rs 375 crores. The capacity will increase step by step to 100,000
units per annum as per the market requirements with an additional
investment of around Rs 125 crores. The engine facility will be a global
hub for meeting the medium-duty automotive engine requirements of
Volvo Group globally for five- and eight-litre engines. The Euro 6-
compliant diesel base engines will be supplied to Volvo Group plant in
Venissieux, France where these engines will be assembled for the Volvo
Group Euro 6 requirements. The same platform will be adapted to Euro
3 and 4 engine (BS3/BS4) technologies to meet the VECV requirements
and other Volvo Group requirements for this type of engines in Asia.

Eicher Engineering Components (EEC) is the automotive component

division of VECV. Established in 1992, EEC has grown to become one of
the largest and most well reputed gear manufacturers in India. Not only
does EEC meet all the automotive component requirements of Eicher
Trucks and Buses, it also manufactures differential gears, transmission
gears and shafts for a large domestic and global clientele, both in the
OEM and spare-parts segments. Besides, EEC also supplies gear boxes
to industrial, agricultural and other segments in the United States and
Canada. EEC has four manufacturing plants, one at Thane
(Maharashtra) and two at Dewas (Madhya Pradesh) manufacturing the

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 complete range of gears, and one at Pithampur (Madhya Pradesh)
manufacturing gear boxes. It is continuously developing new products
and upgrading its technology, while increasing operational efficiency,
to make sure that it gets the best products to the market at the most
competitive rates.

The manufacturing set up in Thane houses state-of-the-art machines

which include Gleason Conifex machines for straight bevel gear,
Pfauter, Liebherr, Mitsubishi (CNC) and Cleveland Hobbing machines,
latest heat treatment facilities and CNC bore and Cylindrical grinding
machines.

The Plant in Dewas, Madhya Pradesh houses technologically advanced

machines and equipment which includes a battery of Mitsubishi CNC
Hobbing machines, fellow shaping machines, Reishauer Gear Grinder
RZ400, Shaving Cutter Re-sharpening machine from Gleason Hurth,
state-of-the-art Continuous Gas Carburising Furnace (from Aichelin) -
fully PLC controlled with robotics for Press Quenching and PLC
Controlled Sealed Quench Furnaces (with hot oil quenching for reduced
distortions).

Eicher Engineering Solutions (EES) is a global engineering service

partner to OEM's and First Tier suppliers in ground transportation,
aerospace, and consumer products. EES utilizes technical
competencies and systematic design processes and combine
sophisticated engineering tools in a streamlined process. With a staff of
250+ of highly experienced engineers and skill sets, EES provides rapid
team response capability in the Americas, India, and China. Providing a
variety of strategic services and engagement models that include
alliances, captive engineering centers, as well as specialized
engineering, design, and analysis resources deployed to the customer
sites. EES brings Total Value: Global Design, Computer-Aided
Engineering (CAE) / Finite Element Analysis (FEA), Prototype, On-site
Resource deployment, and IT / High-Performance Computing (HPC)
solutions that complement business strategies, practices, and the
vision of integrated global product development.

VECV has an employee base of 11000+ employees.

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Manufacturing Competence:

The company's industrial base includes an integrated Commercial Vehicle

factory in Pithampur, producing Eicher trucks and a bus plant at Baggad.
The organization also has manufacturing capabilities in Thane, Dewas and
SEZ Pithampur, dedicated to manufacturing of transmission and
differential gear boxes and gear box assemblies.

Pithampur Plant

The state-of-the-art plant in Pithampur has access to top line

manufacturing processes, which includes cab weld shop with robotic
welding, CED paint shop, integrated testing facilities, 100% hot test
facility for engines and a lean and scalable manufacturing set up. The
machine shop has 17 Horizontal machining centers, special purpose
machine for critical operations like crank bore, cam bore, piston bore and
Joint face finish machining. The transmission assembly section has
hydraulic press for pressing of bearings and a sound proof enclosure for
checking abnormal noise in the transmission units being produced. The
plant also has robotic welding facilities for main body and under body
welding. A pre delivery automated inspection facility is also there to check
the speed and brake related parameters, turning angle and wheel
alignment issues before delivery of the final product to the
dealer/customer.

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The plant has an annual production capacity of 48,000 units.
As a part of the product development process, the organization has a fully
equipped vehicle and engine development center with fatigue lab,
complete virtual vehicle integration capability, different simulations, in-
house competence for electrics and electronics integration, a complete
bus structure and interior trim design capabilities.

Thane Plant

The manufacturing set up in Thane houses progressive machines, which

include Gleason CWP Cutting Machines, Gleason Conifex Machines for
Straight Bevel Gear, Pfauter, Liebherr, Mitsubishi (CNC) and Cleveland
Hobbing machines, state-of-the-art heat treatment facilities and CNC bore
and Cylindrical grinding machines.

Dewas Plant

The plant in Dewas, Madhya Pradesh houses technologically advanced

machines and equipments which includes a battery of CNC Hobbing &
Shaving Machines, Shaping Machines, Reishauer Gear Grinder RZ400,
Gleason CWP Cutting Machines, Gleason Conifex Machines for Straight
Bevel Gear, state-of-the-art Continuous Gas Carburising Furnace (from
Aichelin) with fully PLC controlled with robotics for Press Quenching and
PLC Controlled Sealed Quench Furnaces (with hot oil quenching for
reduced distortions) and Shaving Cutter Re-sharpening machine from
Gleason Hurth. The advanced technology available at this plant ensures
that the transmission gears and shafts manufactured here are of the
highest quality.
In recent years, the group has continually invested in innovation,
technology and expansion. As a result, the units continue to expand their
capacities and efficiency, while adhering to their core principal of quality
and manufacturing excellence.

Procurement:

The assembly of the Eicher trucks and buses takes place at the Pithampur plant.
The engine is produced at the Pithampur facility. The required assembly parts are
manufactured at various locations across the country. The whole purpose is to
reduce the inventory size at the assembly plant.
Apart from the plant at Pithampur VECV has manufacturing facilities in Dewas,
Thane, Baggad which produce the various parts of the vehicles assembled at the
Pithampur facility such as differential, gearbox, bus body etc.

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All the parts arrive at the pithampur facility and the vehicle of the desired model
is assembled.

*Abbreviation:
EEC - Eicher Engineering Components
VEPT - VE Power Train
SEZ - Special Economic Zone
HQ - Head Quarter

Operations:
The assembly plant is a continuous flow type process in which the raw
material moves in from one end and the finished good comes out from the
other end. During this process the vehicle keeps on moving.
At VECV they have world class facility.
Most productive plant to produce upto 66,000 trucks scalable to
100,000 trucks.
Cab weld shop with robotic welding and integrated testing facilities

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 CED paint shop - best in class e-Rodip German technology with
robotic painting
Highly flexible vehicle assembly lines with right blend of technology
to control critical parameters catering over 800+ variants.
State-of-the-art bus plant spread over 46 acre set up under VECV's
overriding vision of driving modernization of the Indian CV market.
Complex and critical sub-assemblies by robots, ensuring cabin
without leakage and even fit and finish

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All the parts come together to form a cabin.

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The cabin is made using spot welding.

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The paint shop
The paint shop first galvanizes the whole cabin by dipping it into the tank.

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Then the paint job is done on the cabins.

Assembly

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The cabin gets fitted with all the electronic equipment required.

The chassis assembly is a combination of chassis, differential etc. is

attached to the cabin.

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The vehicle is the sent to the quality check department.

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The finished truck the rolls out of the plant.

Finished Products:
The pro series

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Eicher Trucks are built to deliver low 'Total cost of ownership'. Designed for
superior performance with better fuel economy. Higher rated payload and
faster turnaround these trucks have low operating cost and, high reliability
loading to higher profits.

1000 SERIES (5 - 14 TONS)

3000 SERIES (10 - 15 TONS )
6000 SERIES (16 - 40 TONS )
8000 SERIES (25 - 49 TONS )

The VE Series

Eicher Terra series offers enhanced value to customer in areas which are
critical to a tipper operating economics. Better uptime and pulling power,
stronger aggregates, and the ability to run more number of trips. The
range has a significant effect on the operators' productivity and
profitability by offering better fuel economy.

TERRA 16 (16 TON)

Eicher 20.16 (16 TON)
Eicher 40.35 (35 TON)
TERRA 25 (25 TON)

Eicher Trucks and Buses (ETB) have a strong presence in the L/MD
segment with a dominant share in the 5T-12T truck segment. Eichers 21-
69 seated buses have a growing presence in the LD school bus, staff and
route-permit segments. ETB has also made strong inroads into heavy-duty
trucks segment of 16T-40T with their VE series of Fuel Efficient heavy-
duty trucks.

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TRUCKS

HAULAGE
EicherTrucks are built to deliver low Total Cost-of-Ownership. The Either
haulage trucks range includes the E2 Plus series of 5T-13T Light &
Medium Duty Trucks (LMD) tagged as Mileage KaBadshah and VE
Series of Fuel efficient Heavy Duty Trucks (HD) of 16T-31T. Designed for
superior performance with better fuel economy, higher rated payload and
faster turnaround these trucks have low operating cost and, high reliability
leading to higher profits.

TIPPER
Eicher Terra series of 16T & 25T offer enhanced value to customers in
areas which are critical to a tipper operating economics. The USP of Eicher
Tippers is their better uptime and pulling power, stronger aggregates, and
the ability to run more number of trips. Terra tippers offer enhanced
benefits which accrues from the results of extensive research done by the
company in the market understanding of the usage pattern and various
duty cycle of its operation. The range makes a significant and positive
effect on the operators productivity and profitability by offering better
fuel economy.

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ARTICULATED TRACTOR
Eicher 40.40 (Articulated Tractor) from the VE series is built to Deliver
More! Fitted with Cummins Engine of 132.5 Kw, Max Torque of 650 Nm
and the ET-80 gear box, the optimized power and torque benefits come
along with the High Fuel Efficiency, stronger aggregates which offer high
reliability and durability. The soft suspended Cabin offers higher driving
comfort which means faster turnaround and more trips leading to higher
revenues.

Special Applications
AMBULANCE
Eicher Ambulance is a state of art van with all facilities pertaining for an
emergency medical vehicle. Vehicle is equipped with on board equipment
not just for safe and swift transfer of patients but also for providing
emergency medical aid.

MILD STEEL CONTAINER

Ready to use from day 1, Eicher MS container options are unique with
respect to fine engineering design and flexibility requirements. Engineered
design, Fine workmen-ship and rugged but light in weight are few features
of Eicher containers offered with 18 months of warranty on container.

CITY BUSES
The latest offering from Eicher - the Rear Engine Semi Low Floor (RESLF)
bus has been developed in line with the guidelines laid down by the
Ministry of Urban Development as applicable to Mass Urban Transportation
needs. This offering has been received with lot of optimism & excitement
by various State Transport Undertakings, City Administrations and
Municipal Bodies across India. Either also offers a wide range of products
in the Mini, Midi and Heavy buses for City Bus Deployment. The products
have been designed to suit the frequent start-stop duty cycle of intra city
operation.

ROUTE PERMIT BUSES

Eicher offers a wide range of chassis for Route permit (Stage Carriage)
deployments. Eicher products are well suited for the unique requirement

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of the route permit application, which necessitates a frequent start-stop
operation, overload and rugged usage.

BUS CHASSIS
Eichers philosophy has always been to provide a perfect platform for a
perfect bus. In this endeavour Eicher offers a wide range of chassis
suitable for the various applications. Eicher bus chassis consists of an
assembly of all the essential parts like engine, transmission, driveshaft,
differential and suspension, but without the bus body.

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Distribution networks:

Dealer network 272 nos. including

10 COCO outlets
Additional 40+ site support facilities
23 distributors
156 Eicher Genuine Parts Shoppe and more than 2500 multi-brand
parts retailers
Over 150 touch points.
Hub and spoke network model
Sets benchmarks in the industry for vehicle uptime and productivity

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VECV Challenges v/s Edge

Challenges Edge

Stricter emission and safety Investing early in fully built

vehicles and emission norms

Stronger regulation of Building products apt for right

overloading pay load and mild overload
conditions

Better infrastructure leading to Building more reliable engines

higher speeds and mileage and driveline

Increased influence of drivers in Better comfort features for the

purchasing decisions drivers

Professionalization of Value selling, more efficient

transportation and logistics premium products, continuous
leadership in future engineering
Growing demand in premium Vehicle quality and after-market
domestic segment excellence

Availability of trained drivers Driver training and regional

academy

Higher dependence on logistics Developing products aligned

with evolving customer needs-
PRO Series

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Increased need for ergonomic,
superior aesthetics in buses
Modern technologies, features
at mass market prices
Frugal approach and inclusive
innovation with Volvo
collaboration
World class state of the art
integrated bus plant

Logistics:
Volvo Eicher currently still moves trucks in the traditional jockey style
that has characterized the truck makers outbound logistics and that of
most others in India since its first vehicle left the factory back in 1985.
However, with a 100,000-unit total in sight, the issues around driver
shortages, quality and protecting the environmental are not likely to
subside. Ever since heavy vehicles were first made in India several
decades ago, normal sales practice has been to put a jockey in the
vehicle chassis (rather than the fully built-up bodies) and command him to
drive, usually in a makeshift seat, to the nearest dealer point and
subsequently to the door steps of the final customer, often covering
several thousand kilometres in doing so. Until recently, such jockeys drove
without even a canopy over their head to protect them or the vehicle from
rain or shine. Today, such cover has become mandatory under Indias
Central Motor Vehicle Rules (CMVR).
Plants : Pithampur, Madhya Pradesh
Production : 70,000 units per year
Depots/RSOs : 27 (regional sales office)
In-plant yards :3
Yard capacity : 500 vehicles (all sizes)
Transporters by region: Railroad Logistics, Pune; Ashok Garage,
Mumbai; Agarwal Packers & Movers, Delhi; All India Transport Agency,
Mumbai; Kamal Transit Lifters, Ahmedabad
Given the countrys complex tax structure, businesses transfer stock to
their own regional sales offices (RSOs) or depots in almost in all state
capitals until the vehicles are sold. This process eliminates the need to
pay taxes at every single interstate border. When an order is placed and
payment received, a vehicle is released from the nearest depot to the
buyer and tax is paid to the relevant state.
In future, VECV admits that truck-on-truck transport is the inevitable
future for Volvo Eicher. The potential for tax reform and the introduction of

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a Goods and Service Tax (GST), which would eliminate taxes at state
borders, is expected to change the distribution model in India to one of
larger distribution centres that would serve multiple states, and which
would likely favour the bulk movement of trucks on transporters. The
company is already in negotiations with a few truck-on-truck operators
that service the likes of Tata and Leyland. Perhaps the biggest argument in
favour of truck-on-truck transport is the benefit of delivering zero-
kilometre vehicles. After all, the customer deserves nothing less than a
factory fresh vehicle. But Dange points out that its rare for any vehicle,
moved by truck or not, to be delivered with zero kilometres. Even trucks
carried on trucks are usually dispatched from manufacturing sites to
depots and from there a jockey drives them down to dealers.

References:
www.vecv.in
http://www.team-bhp.com/forum/commercial-vehicles/145113-
pictorial-eichers-truck-bus-factory-pithampur.html
http://www.eicher.in/AnnualReport2015-16/pdf/VE%20Commerical
%20Vehicles%20Limited.pdf
http://automotivelogistics.media/news/volvo-and-eicher-looking-to-
expand-beyond-india

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