Eicher Motors
Case Analysis
SDM, NMP Term IV
Group 4
Abhijeet Tomar - 03
Argha Ray - 15
Khushal Malik - 28
Vipin Kathuria– 59

Context
• LCV market liberalized in 1990 by GOI.
• DCM Toyota, Allwyn Nissan, Swaraj Mazda and Eicher Mitsubishi are
competitors.
• Toyota has first mover advantage.
• Eicher recovering from the midst of a financial crisis.
• Spares and Reach drive sales success.
• Nascent market cooling off.

Market Dynamics:
• Target segment includes Inter City and Intra City Transport Service
Providers, Small and Medium Traders and Cab Service Providers
• Spares sold through Small Autopart Retailers and Garage Owners.
• Market infested with unscrupulous middlemen.
• Long waiting lines as a hangover of License Raj.
• Toyota’s first mover advantage nullified as prominent well located
showrooms symbolizes luxury, seldom a consideration for end users
seeking usability and low operational costs.

Eicher’s Yardsticks:
• Slump in Tractor market has caused precarious cash position.
• It’s expertize in Tractor distribution can be easily leveraged.
• Tractor market slump must have affected Eicher’s channel as hard as it did
Eicher.
• Diversification proposition into LCV to Eicher’s channel can be a unique
selling point to strengthen relations and mitigate their risks.
• Spares has to reach every nook and corner of the country to compete with
private labels.
• Existing distribution channel will not need large quantum investments.
• Design separate channels for LCV and LCV spares.

Two Channel Design:

Design Rationale:

Channel Resonance:
• Toyota’s folly is geared toward a luxurious Car market rather than LCV.
• Mazda’s model may turn out to be more effective in terms of both sales
and cost considering the target segment.
• Carrying both a Tractor and LCV may make more sense for already scathed
Tractor Dealers.
• Impress upon Channel Members that cooling off in LCV market is due to
overbooking by middlemen who kept real customers in abeyance due to
flawed advance booking model.
• Removing long waiting lines for immediate possession to real customers
by removing advance booking will attract those who bit the dust with
other competitors.

Channel Selection:
• Exclusive Eicher Dealers.
• After sales service is paramount.
• Select those who had been brother in arms during hard days of Tractor
market shock.
• Quick learners who can seamlessly recast Tractor selling expertize to LCV
sales.
• Downstream partners who show signs of recovery as does Eicher.