Eicher Motors Investors Day

November 30, 2015

Chennai

Investors Meet 30.11. 2015 Page No : 1

Key pillars of Supply chain
1. Extremely lean
1. Single location completely integrated
2. Responsive eco system
2. Make Vs buy
1. 3 key aggregates in-sourced
2. Co-Located supply partners
3. Quality and consistency
1. Best in class manufacturing both In-house and suppliers end
2. Cutting edge technology for Quality
3. Low cost automation for efficiency
4. Drive Enterprise wide quality through motivated work force, process
interventions

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Manufacturing Locations - 2 3

1.Tiruvottiyur
from 1955

2.Oragadam
3.Vallam from 2013
Greenfield Q3 2017

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Capacity Growth (2011 - 2015)
2015
2014 460,000 Bikes Est
2013 307,000 Bikes YOY Growth :
2012 181,000 Bikes YOY Growth :
52%

70%
2011 115,600 Bikes
YOY Growth :
57%`
* Commencement
of Phase-2
Ramping up of operations at
YOY Growth : Commencement phase-1
76,000 Bikes Oragadam
52% of Phase-1 operations at
operations at Oragadam
YOY Growth : Efficiency Oragadam
45% extraction at
TVT through low New Model: Purchase of 50
cost automation Bullet 500 Acre Land at
New Models : Vallam-for
Cl. Chrome New Model : further capacity
enhancement
Thunderbird Continental GT Purchase of 4.5 Acre
Desert Storm land- for building tech
center close to city

New plant commissioned in less than 18 months

Investors Meet 30.11. 2015 Page No : 4

RE Manufacturing Depth Over 5 yearsscale 6 times, Fabrication capability added

In Lakhs
2016 1.2 1.2 4.8 6.6 4.4 6.2 7.5 8.4

2015 0.2
1.0 3.6 4.8 3.0 4.8 5.2 5.2

2014 2.4 3.2 3.0 3.6 3.9 3.2

2013 0.5 2.0 1.5 2.0 2.0 2.0

2012 1.5 1.5 1.2 1.5 1.5

0.6 0.8 0.8

2011

0.8 0.8

Swing arm Frame Fuel tank Machining Plating Painting Vehicle assembly Engine

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Painting Transformation to cutting edge technology

Manual spray painting Cathodic Electro Deposition &

Robot painting

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Fabrication capability - Fuel tank, Frame & Swing arm for enhanced Ride and Handling
experience

Fuel tank Frame

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Machining Strategic Power train components

Machining of 4Cs
In-House

Cylinder Cylinder
Crankcase Crankshaft
Head Barrel

Installed 100 CNC Machines for machining 4Cs In-House...built

in flexibility for future platforms

Investors Meet 30.11. 2015 Page No : 8

Assembly

Vehicle Assembly Power train

1. Gender and Geographical mix in work force

2. All assemblies balanced for 1 min takt time
3. Designed for multi model production and fungibility for future
platforms

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Retaining the charm of craftsmanship

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2016 is balanced to 6.2 L deliveryChrome plating & Painting critical to delivery
Engine
Paint shop Machining
Assembly
Vehicle
Plant Powder Powder Chrome plating Fuel tank
Liquid Assembly
PT-CED coating coating (3 Shift) (2 Shift)
painting
Vehicle Engine
3.0 L
Removed to
provide area 3.0 L . New line
TVT - - 0.75 L start in Q3 - 1.2 L 2.4 L ( UCE) 1.5 L -
for new
Plating Line Available capacity
in 2016 is 1.4 L

6.0 L
3.6 L (UCE) 6.0 L
ORG 6.6 L 6.6 L 6.6 L 6.0 L - 5.4 L 4.8 L
2.4 L ( New ( 800+1200 )
model)
Bought out 1.8 L 1.8 L
6.2 L
Capacity
6.6 L 6.6 L 6.6 L ( 0.5L for 6.2 L 6.6 L 8.4 L 7.5 L 6.6 L
(2016)
spares)
Peak Capacity
(2018)
Including Vallam - 9.0 L

Investors Meet 30.11. 2015 Page No : 11

Supply Management

Investors Meet 30.11. 2015 Page No : 12

Supplier Rationalization helped in Quality, Cost & Delivery

300

247
250
211
193
200
12 171 166
No. of Suppliers

Casting
23 13
150 15
Electrical 30 21 19
SheetMetal 24 24
30
100 30 30
Mechanical 41
38 38
50 Forging
Others 57 45 40
0
2011 2012 2013 2014 2015

Investors Meet 30.11. 2015 Page No : 13

Supply Partners : Getting consolidated at South to achieve scale and leverage

Monthly Purchase Suppliers Inventory

% Rs.Crores Nos Days

12% 27.4 31 10
North

West
Monthly Purchase Suppliers Inventory
% Rs.Crores Nos Days
34% 80.9 32 7 Chennai
South Monthly Purchase Suppliers Inventory
% Rs.Crores Nos Days

51% 118.8 95 2

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Lean Raw material Inventory and high velocity
Methodology Adopted:

Commodity based Buying Teams

In Days Process based Warehousing Teams
Conversion to Door Delivery Returnable
Packing & Reverse Logistics
14 Strong SAP backbone
13 13

12
12

10
10
9

8
2011 2012 2013 2014 2015

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Raw material cost / net sales 9% in 5 years
Methodology Adopted:

Dedicated Cost Management Cell

68 Zero based analysis- yield
66 improvements
66 Negotiations volume growth, alternate
64 sourcing
64 Leverage Eicher Group for buying raw
62
Percentage

material
62 50 + Value engineering on at any time.
60 59

58 57
56

54

52
2011 2012 2013 2014 2015 Till Sept

Investors Meet 30.11. 2015 Page No : 16

Plant visit Route map

ENGINE PLANT 1 PAINT SHOP 2

PAINT SHOP 1

VEHICLE ASSY 1 VEHICLE ASSY 2

WAREHOUSE 1 ENGINE PLANT 2
CANTEE
N

NORTH
You are here

Investors Meet 30.11. 2015 Page No : 17

THANK YOU

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