Royal Enfield to focus on strong global growth

Royal Enfield to focus on strong global growth

10th Jul 2015 2:17 pm

While total sales for Royal Enfield are expected to grow, it is the exports that are likely to see exponential jump.

Royal Enfield is pretty much unchallenged in the mid-size motorcycle segment (250 - 750cc) in India, with a market share of more than 90 percent. Buoyed by this success, the manufacturer is looking at making deeper inroads into global markets.

While India is undoubtedly the primary market, and the UK its heritage market, Royal Enfield expects a lot of business to come from markets like Latin America, Colombia and Indonesia. Not only are all of them rapidly growing, they are also economically and demographically very similar to the Indian market. A large part of this demography is the commuter class, majority of which is likely to get astride motorcycles that are not only more powerful, but also more evocative. These are the kind of consumers that Royal Enfield is looking to bring under its canopy.

This raises the question of production capacities. While RE’s plants at Oragadam and Thiruvottiyur, in Chennai, are already running at a high capacities, and order books are claimed to be ahead of annual sales, it appears that the company has no immediate plans of reworking its manufacturing set-up. In an interview with sister publication Autocar Professional, Rudratej Singh, President, Royal Enfield, has categorically stated that although plans to reach into newer markets are being made, there are currently no plans to build assembly/manufacturing units overseas.

In 2014, the company sold a little more than 3 lakh units, of which it exported just 6,221 units. To continue tasting success, Royal Enfield will look to considerably improve its export numbers; although it is quite successful in the Indian mid-size segment, competition will not relent, as a large number of manufacturers position models at Enfields’ price points or performance points.

Sales targets for the current year have been set at 4,50,000 units. Royal Enfield had also announced that the capacity of its current plants will expand to six lakh units. While the lion’s share of those units will obviously be set aside for the Indian market, expect the share of exports to grow exponentially, sooner than later.

SURAJ KANNAN

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