Importer to Innovator:
The Untold Story Behind Eicher’s Success
Introduction
There are only few visionary leaders who understood the potential of India’s industrial growth, Sir Man Mohan Lal was one of those pioneers. He wanted to modernise Inida’s agricultural system but he not only sticked to that, his venture evolved into one of India’s most iconic automotive group – Eicher.
How Eicher group evolved from a tractor importer to global force in commercial vehicle and mobility solutions. Not only that they made first indigenous tractor and also played a major role in revival of iconic Royal Enfield brand.
How Eicher Group Started:
After getting the independence in 1947, India was facing severe challenges as a newly independent nation. That time India’s agricultural economy mostly on manual farming methods.
Here, Sir Man Mohan Lal recognised a high potential to change India’s agriculture sector from manual farming to mechanised farming this might fascinating today’s time but that time (around 1948) after the recent independence India’s economy was fragile and purchasing power of people was limited. Considering these circumstances Sir Man Mohan Lal took a bold decision and established Goodearth Company, they import tractors and distribute in India for the farmers.
In between 1952 to 1957, the ‘Goodearth Company’ sold around 1500 tractors. This may sound less but that time under those critical circumstances it was a huge number. Eventually it became one of the most successful automobile group.
Strategic Partnership with German brand:
Soon, Sir Man Mohan Lal understood the limitations of only importing and selling. He also recognised the potential of local manufacturing.
In 1958, he established a strategic partnership with German tractor brand named Eicher Traktoren. The collaboration named the new group as Eicher Tractor Corporation of India Ltd. This was the entry in the way of making indigenous tractor.
Just 1 year after the collaboration began in 1959, Eicher rolled out India’s first indigenously made tractor from their Faridabad factory. This was more than any business milestone this was an announcement of India’s growing industrial self-reliance and technological capabilities. By 1960, the company was renamed as Eicher Tractors India Ltd. Not only that, in 1975 Eicher Tractor India Ltd. achieved complete Indianization which means tractors were entirely manufactured with Indian components and expertise.
A spectacular business achievement:
The most extra ordinary thing happened in 1980s when Vikram Lal (son of sir Man Mohan Lal) done a reverse takeover. During the depression of German economy Eicher Traktoren was struggling in financial distress. That time Vikram Lal acquired Eicher Traktoren in approximately 80 crore.
The Birth of Eicher Motors Limited (1982):
Another important milestone for company was achieved by 14th October 1982, when the incorporation of Eicher Motors Limited happened. The certificate of business commencement was obtained by 28th March 1983.
On that same year Eicher Motors signed a collaboration with Japan’s Mitsubishi Motors Corporation for manufacturing light commercial vehicles.
Royal Enfield Acquisition:
Eicher group did not restricted themselves only in four-wheeler vehicles, in February 1990 Eicher group purchased 26% stake in Enfield India Ltd., the manufacturer of iconic Royal Enfield motorcycles. Only in 3 years Eicher group increased their share to 60% and took majority control.
In 1994, Eicher group changed name of Enfield India Ltd. to Royal Enfield Motors Ltd. This same year the agreement with Mitsubishi concluded after completion of technology transfer.
Strategic Partnership with Sweden brand VOLVO:
In July 2008, Eicher group formed a 50:50 joint venture with Sweden’s Volvo Group and established VE Commercial Vehicles Limited to design, manufacture and market commercial vehicles. This partnership includes Volvo’s manufacturing expertise with Eicher’s distribution experience. In 2010, VE series launched their heavy-duty trucks and changed the landscape of Indian Commercial Vehicles.
Electric Mobility & Future Strategy:
Eicher group has made a significant investments not only in strategic partnerships but also in internal development. In December 2022, the company invested €50 million for a 10.35% equity stake in Spain based company Stark Future SL.
Conclusion:
The journey of Eicher group is not only a timeline of corporate milestones, it is journey of India’s industrial rise and understanding the value of visionary leadership. Not only Sir Man Mohan Lal, his successors (his son and grandson) also done something that helped Eicher group in a good way.
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