Siddhartha Lal, Managing Director of Eicher Motors, the parent company of Royal Enfield has said that RE had built a fortress which will be difficult for robbers to penetrate. Lal said this in response to queries from the media about Bajaj Auto MD Rajiv Bajaj’s comment on how Royal Enfield has built a bank for the mid-size motorcycle segment, and that Bajaj intends to rob that bank. Rajiv Bajaj said this at last month’s launch of the made-in-India Triumph Speed 400, adding that the mid-size motorcycle segment is amongst the most profitable segments to participate in.
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Royal Enfield focusses on consumers, not competition, says Siddhartha Lal.
“We don’t worry about rivals, we don’t obsess about competition, unlike our competitors. We obsess about the consumer and we are many steps ahead of our competitors,” Lal added during an interaction with the media during Eicher Motors’ Q1 earnings call.
Also Read: Triumph Speed 400 Review
The Triumph Speed 400, manufactured by Bajaj Auto, has been launched at Rs. 2.33 lakh (Ex-showroom) and will target Royal Enfield's volumes in the mid-size segment.
Siddhartha Lal’s comments were in reference to global brands Harley-Davidson and Triumph Motorcycles entering the fast-growing mid-size motorcycle market in early July. Both Harley-Davidson and Triumph have introduced made-in-India products in collaboration with their Indian partners, Hero MotoCorp and Bajaj Auto respectively. With the Triumph Speed 400 and the Harley-Davidson X 440, both Bajaj Auto and Hero MotoCorp, two of India’s largest two-wheeler manufacturers, are targeting the 250-500 cc segment which is dominated by Royal Enfield.
Also Read: Royal Enfield Records Sales Of 73,117 Motorcycles In July 2023
The Harley-Davidson X 440 is manufactured by Hero MotoCorp and will also vie for market share in the segment currently dominated by Royal Enfield.
Siddhartha Lal said Royal Enfield is confident of holding on to more than 80 per cent market share in the mid-size motorcycle segment, spanning 250 cc to 750 cc. Royal Enfield today holds more than 90 per cent market share in the motorcycle market above the 250 cc category, and Siddhartha Lal said that Royal Enfield has single-handedly grown the segment 20X from 50,000 units per annum to almost 1 million. In fact, Lal added that new competition will potentially help grow the segment from 1 million to 1.5 million and even 2 million units in the coming decade.
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“We are okay with market share falling. At 90 per cent, there’s only one way the market share could go, that is south with new competitors coming in. But we are ok with that, but the good part is the overall market, however, is bound to grow,” Lal added.
“More competition should help grow the mid-size motorcycle market. When there are new offerings in the market, there is new excitement. The outcome of all this would be that the size of the mid-size market will grow at an even higher space, than before, And I believe, we as leaders will benefit tremendously from the growth in the segment,” he added.
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With the Hunter 350, Royal Enfield has been successful in getting new consumers into the brand. The Hunter 350 is now second to the bestselling Classic 350 in sales volumes in the brand's portfolio.
Also Read: Royal Enfield Hunter 350 Review
The Eicher Motors MD said that competitors like Triumph and Harley-Davidson are entering the segment and Indian market through a contract manufacturing route, which is different from Royal Enfield which manages its own ecosystem. Royal Enfield is working on a number of new products, a few of them which are new models based on existing platforms in the 350 cc and 650 cc segments. The brand’s next big launch is the updated Royal Enfield Bullet 350, slated for the end of the month. Following that, will be Royal Enfield’s all-new adventure bike, the much-anticipated Himalayan 450, based on an all-new platform which is expected to attract more consumers into the brand.
The Royal Enfield Classic 350 is the brand's largest-selling model.
Also Read: Royal Enfield Classic 350 Review
In the Q1 results of FY 2024, Eicher Motors has posted a 50 per cent rise in net profit, the company's highest-ever for a quarter. The company also reported a record rise in revenue from operations at Rs. 3,986.4 crore during the April - June 2023 quarter. Royal Enfield sold 2,25,368 motorcycles in the quarter under review, up from 1,86,032 motorcycles in the same quarter a year ago, recording a growth of 21.1 per cent. Royal Enfield's parent company Eicher Motors announced that it has lined up Rs. 1,000 crore in capital expenditure for Royal Enfield in the financial year 2023-24.
