Royal Enfield targets to claim pole position in mid-sized bikes globally

Royal Enfield, the motorcycle arm of Eicher Motors, is gearing up to be present in all “relevant” markets of the world over the next decade.

This is part of its strategy to be the top player in the mid-sized motorcycle market globally, said a top executive of the company. “Wherever there is potential for mid-sized bikes, we will be there and be the number one in the segment globally. We will be present in all the relevant markets over a decade or so. That’s the plan in the coming years,” said Siddhartha Lal, managing director (MD), Eicher Motors, at the post-earnings call on Wednesday.

Presently, Royal Enfield has presence in developed and developing markets, including North America, UK, Europe, UAE, Asia-pacific and Latin America, either through exclusive stores or multi-brand outlets. It recently opened a flagship store in Tokyo, as part of its plan to step up presence in the Asia-pacific. It is “evaluating opportunities” to set up completely knocked down (CKD) facilities in priority markets like Asia-pacific and Latin America. It set up a CKD unit in Argentina, according to the investor presentation on the company’s website.

Vinod Dasari, chief executive officer (CEO), Royal Enfield, said, during the December quarter, the company opened 13 flagship stores in international markets, taking the total count to 98. It plans to take it

up to 100 by the end of FY21.

“Our overall experience in the international market has been pretty good,” said Dasari, adding that the long-term goal is to have at least 20 per cent of revenue coming in from international markets. This segment accounted for 9.1 per cent of the revenue in FY20.

Royal Enfield sold 199,000 motorcycles in the December quarter, a 5 per cent year-onyear (YOY) rise. Exports went up 29 per cent. Though the company has been ramping up production of bikes to cater to the strong demand across the country, supply chain issues caused by global shortage of semiconductors have been impacting the ramp up, said Dasari. The “low-cost and highmargin approach” to entering the markets has been very gratifying, said Lal. Most firms that enter international markets make big investments in either new products for different markets, new plants or substantially-evolved products. But Royal Enfield is developing new products uniformly with an eye on international markets. For instance, the Interceptor has identical models going across the world. Therefore, there is no additional capex going in for entering new markets.

The company has chosen to invest in market development in countries it has identified as strategically vital. In some cases, it has marketing firms. For instance, in Europe, North America, Thailand and Brazil, Royal Enfield has a whole team engaged in marketing, service, and distribution. But in countries like Japan, it has entered through a dealer to keep the costs low, added Lal.