Royal En­field to push ex­pan­sion abroad

Business Standard - - COMPANIES - T E NARASIMHAN

Royal En­field (RE), the mo­tor­cy­cle man­u­fac­turer, plans to al­most double its exclusive re­tail pres­ence abroad.

The Chen­nai-based en­tity has iden­ti­fied Thai­land, In­done­sia, Colom­bia and Brazil as hav­ing the po­ten­tial to be­come very large mar­kets for it­self over time. It will be in­vest­ing in all four.

Siddhartha Lal, man­ag­ing di­rec­tor of Eicher Mo­tors, the par­ent en­tity of RE, said there were around 25 exclusive stores abroad and the plans was to add an­other 20-25 this year. The pace would con­tinue in the com­ing year, too.

On the four coun­try mar­kets men­tioned ear­lier, RE has five or six exclusive stores in Colom­bia and only a sin­gle one in the other three.

RE is adding sin­gle stores in a cou­ple of other mar­kets, too, with the hope that they reach a stage in the next year or two for an ex­pan­sion.

“We ex­pect that over the next five years, the de­vel­op­ing mar­kets will be on a dif­fer­ent or­der of mag­ni­tude. There­fore, our re­ten­tion would be much higher there,” said Lal.

Adding: “Our North Amer­ica mar­ket, our first owned sub­sidiary there, has taken us a lit­tle bit of time -- we have just been adding deal­ers and get­ting up to speed in the US mar­ket.” He said he ex­pected a good year in Amer­ica and Europe. There are five coun­tries in the lat­ter -- Bri­tain, Ger­many, France, Italy and Spain – where RE has about 50 deal­ers each. Some are exclusive to it but most are multi­brand. The com­pany is sell­ing well in some of these mar­kets but the size in each is low. And, nor­mally of slightly higher pow­ered mo­tor­cy­cles than RE has in its cur­rent port­fo­lio.

“That means we are still a niche player here than a main­stream player, which we plan to be in de­vel­op­ing mar­kets,” said Lal. The old­est of its brand is Royal En­field it­self, in con­tin­u­ous pro­duc­tion with the fo­cus on 350-500cc ones.

More on busi­ness-stan­dard.com

RIGHT NOW, WE ARE LEARN­ING AND EX­PAND­ING IN THESE FOUR CORE MAR­KETS. ANY OR ALL OF THESE COULD BE­COME VERY LARGE MAR­KETS FOR US OVER THE NEXT DECADE. IT IS THESE FOUR CORE MAR­KETS THAT WE ARE EX­PAND­ING ON

SIDDHARTHA LAL,

MD, Eicher Mo­tors

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