Eicher Motors is analyzing entering the nascent LCV market in India. They have several competitors who entered the market earlier such as Toyota, DCM Toyota, Allwyn Nissan, Swaraj Mazda. Eicher is recovering from a financial crisis and wants to leverage its expertise in tractor distribution to distribute LCVs. The document proposes a two channel design - one channel for LCV sales and another dedicated channel for LCV spare parts sales to reach all areas of the country. It suggests selecting exclusive dealers who were supportive during the downturn in the tractor market and can apply their tractor selling expertise to selling LCVs.

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

2. 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.

3. 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.

4. 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.

5. Two Channel Design:

6. Design Rationale:

7. 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.

8. 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.