In a bid to cater to the growing demand for its Royal Enfield motorcycles and commercial vehicle business, Eicher Motors intends to invest over Rs 1,000 crore in FY24. 

The company will invest Rs 1,000 crore for Royal Enfield's expansion of its portfolio and diversification of its electric vehicle business. Separately, the company’s commercial vehicle joint venture VE Commercial Vehicles will invest Rs 750 crore - which will go into the expansion of its engine plant and paint shop at its Bhopal factory to cater to the increased demand.

Speaking to media post Q4 earnings conference call, Siddhartha Lal, MD of Eicher Motors said, "We are happy to have closed the last financial year, with an extremely strong performance. Eicher Motors Ltd and Volvo Eicher Combine is now Rs 33,000 crore which is greater than USD 4 billion dollars, which is a substantial number, we have set ourselves up for a very strong base to grow both Royal Enfield and Volvo Eicher's businesses."

During the financial year 2022-2023, the company clocked its highest ever total revenue from operations, PAT and EBITDA. Eicher Motors’s total revenue from operations was Rs 14,442 crores up by 40.2 percent as compared to Rs 10,298 crore in the same period year ago. Its EBITDA stood at Rs 3,444 crore, up by 58.5 percent as compared to Rs 2,172 crore in FY22. Similarly, profit after tax also recorded a jump of 74 percent at Rs 2,914 crore as compared to Rs 1,677 crore for the same period last year. 

Royal Enfield posted lifetime high sales of motorcycles at 834,895 units in FY23, up by 38.4 percent from 6,02,268 units in FY22, and up from its previous best performance in 2018-19. During the year, Royal Enfield also crossed the 100,000 export shipments milestone for the first time.

Lal said he is upbeat on both businesses of Eicher Motors, with the international markets of Royal Enfield hitting an inflection point by crossing 1 lakh units and the heavy-duty truck business consistently at 8 percent market share.

The performance of Eicher Motors’ commercial vehicle wing also remained upbeat last year. According to Vinod Aggarwal, MD and CEO VECV FY23 was a break-out year for VECV where the company witnessed its best-ever performance and registered highest ever sales of 79,623 units. VECV’s revenue from operations was Rs 18,952 crore during the year under review, up by 49 percent over the previous year’s revenue of Rs 12,724 crore. Its EBITDA for FY23 stood at Rs 1,369 crore, 91.2 percent higher than Rs 716 crore last year. The company's PAT grew to Rs 581 crore as against Rs 111 crore last year.

"We look forward to this year, which has started on a good wicket for RE and VECV, it is going to be another fantastic year, there are lots of interesting things coming up," added Lal. 

On Electrification plan

Lal says while the shift towards electric vehicles is gathering pace, the internal combustion engine is here to stay for the next decade at least. There is strong traction for EVs for a short-distance city commute, but for long distances, internal combustion engines will continue to remain core till the time-weight and cost equation remains high.

On Royal Enfield's own EV plans, Lal said the company is working day and night on EVs, "We are not chilling, there is a crazy amount of pace on EV development. Our process does take more time since our testing and validation process is better than the best in the world and that is where we take more time and effort.

Given the rapid pace of change on the electrification front - Royal Enfield new product development process is agile, assured Lal citing that if certain technologies like battery or motor evolves faster, those components can be upgraded in a shorter span of time. 

"We are following a very stringent process to come out with it. We are working tirelessly. At Royal Enfield, we focus on one thing and we do it extremely well, with a pointed approach where the market opportunity is. We have a very particular plan, not just for India but global markets as well. The products are under development, we take our due time, but when we do come out, we are best in class and best in the world now," assured Lal. 

New Royal Enfields in the offing

On the mainstream two-wheeler front, the company says the newly launched Hunter motorcycle has already crossed the 1 lakh units mark and a majority of the buyers were non-Royal Enfield intenders of the past. 

To build the momentum further, the company will be relying on its J platform to come out with a slew of new offerings in the coming year. 

"Lot of new motorcycles are coming," says R Govindarajan, CEO, Royal Enfield, "We also have a very well thought through line up in the coming year. We will continue to develop our products and community development, We are very focused on what customers are looking for - i.e. pure motorcycle experience, hence we offer apparels, accessories and focus has always been on pure motorcycling experience and community building which is what we are building."   

Record year for VECV

For Volvo Eicher Commercial Vehicle business, FY-23 has been a record year with sales of 80000 units - with this the company handsomely breached its previous peak by 9%, whereas the overall commercial vehicle market is still 15% lower than the earlier peak, helping company to scale record market share across segment.

As India is fast pushing for the use of hydrogen for a cleaner future, VECV also aims to invest Rs 250 crore in hydrogen-based technologies in the next 3–4 years. At present, the company is working on six fuel technologies, namely diesel, biodiesel, CNG/LNG, electrification, hydrogen internal combustion engine (ICE), and hydrogen fuel cell, of which the last two are in the development stage. Currently, VECV is developing two hydrogen engines, one for medium-duty trucks and another for heavy-duty vehicles, with the expertise of Volvo Group. Both are being designed to have a range of 700 km and 1,500 km, respectively.