Royal Enfield does not need a partner, says Lal
Royal Enfield does not need a partnership either for technology or for manufacturing of motorcycles, said Siddhartha Lal, managing director and chief executive officer of Eicher Motors, after Bajaj roped in Triumph for products development. Lal said there was no need for Royal Enfield to have a partner at this point. Royal Enfield dominates the domestic mid-size motorcycle market (250-750cc).
“There is certainly no partnership required. It is not from either technology or manufacturing or distribution. Therefore, if you look at the three aspects of the business — marketing distribution, manufacturing, and technology — we do not need a partner now. It is not a desperate need. I mean, not even desperate, it is not even a real need, let us put it that way,” Lal said recently, when he was asked about a need to partner another company in the context of Bajaj Auto’s partnership announcement with Triumph, a British motorcycle brand.
Bajaj and Triumph will together produce mid-capacity bikes for the Indian and overseas markets. Engineers from Bajaj Auto and Triumph have been working on the new motorcycles at the former’s Chakan plant for some months. The no-equity partnership will develop a range of mid-capacity 250-750 cc motorcycles to grab the share of this fast-expanding segment, dominated by Royal Enfield. Bajaj Auto in December launched Dominar with a 373 cc engine to take on mid-capacity market leader Royal Enfield, and it currently sells about 1,100 units a month. Royal Enfield’s monthly average is 3,200 units in 350-500cc segment. It gets the bulk of sales from the 250-350 cc segment where it has about 99 per cent share.
Lal said the kind of work Royal Enfield is doing in product technology and development over the past two-three years does not warrant the need for a partner.