Amit Panday
Pune: Royal Enfield motorcycles are equivalent to the bikes manufactured and sold by the Japanese and German companies, Siddhartha Lal, managing director, Eicher Motors Ltd, said on Thursday.
He was referring to the new products launched over the past two years including the 650 Twins – Interceptor 650 and Continental GT 650 – and the latest model Meteor 350.
“We follow extremely rigorous processes, we do not take any shortcuts in product development and testing. Our motorcycles are world-class, they are equivalent to the Japanese and German offerings,” Lal said, while addressing queries in a post results call on May 27.
“However, we have to continue trying harder because we started late and we are behind them,” he said, adding, “in some ways our bikes are better and that’s why we are outselling the Japanese and German bike makers in several international markets.”
Lal’s comments come a week after Royal Enfield had issued a recall impacting nearly 2.37 lakh motorcycles sold across India and several global markets such as Thailand, Indonesia, Malaysia, Philippines, Australia and New Zealand. The recall was made after the company identified a defective ignition coil in bikes manufactured and sold between December 2020 and April 2021 under its Meteor, Bullet and Classic range.
The company, however, expects that only 10% of the bikes recalled would require replacement of the faulty part.
Royal Enfield sold 5.73 lakh motorcycles in FY21, down 13% YoY on COVID-19 related disruptions. It included sales of almost 5.49 lakh units of its 350cc range and about 24,000 units across its Himalayan and 650 Twins.
Notably, after discontinuing its 500cc Bullet and Classic bikes last year owing to the implementation of the BS-VI emission norms, the company now retails only the Himalayan models in the 350cc-500cc category.
While the sales of Himalayan range fell from 15,302 units in FY20 to 13,562 units in FY21, sales of the 650 Twins halved to 10,256 units during the period.
Over the last two fiscal years, Royal Enfield has sold less than 31,000 units of its 650 Twins in India. Meanwhile, it has exported less than 34,000 units of the Interceptor 650 and the Continental GT 650 during the same period.
“We are long-term players, we are improving. We have a strong order book and as you saw with the Himalayan, we started slow but the volumes picked up over years gradually as we continued to make improvements on the product. That said, the 650 Twins do not require improvements (in quality). But it takes time for the consumers to rise up to the bigger (more premium) brands,” Lal said, when asked about the 650cc motorcycles delivering limited volumes.
“We will continue to invest in the 650 Twins. We have captured the entire market above 500cc motorcycles and all the international players are struggling in India in this space,” Lal said, pointing at the 500cc-800cc motorcycle segment.
According to the SIAM data, domestic wholesales in the 500cc-800cc motorcycle category stood at 11,523 units and 22,910 units in FY21 and FY20 respectively. Of that, Royal Enfield’s 650cc models sold 10,256 units and 20,188 units during FY21 and FY20 respectively.
“Midsize motorcycles with 500cc and above engines have grown tremendously over the recent years (globally). Royal Enfield has fuelled this growth and we, clearly, are the leaders in this segment,” he said, adding that the company is heavily banking on its large domestic customer base, which includes several million riders.
The company is preparing for new launches across the 350cc and the 650cc engine segments. It has been evaluating a number of potential models on its existing platforms.
“While we are going to launch new products, it will be very controlled with focus on the midsize segment. We are looking at what more we can do with every platform to meet the requirements of our customers. This is an area of enormous debate within Royal Enfield. We continue to discuss the unprecedented cost increase, value engineering, among other areas,” Lal said.
The midsize motorcycle segment, which refers to bikes typically powered by 250cc-800cc engines, is increasingly witnessing new entrants looking to grab a pie of the lucrative market in which Royal Enfield continues to dominate.
Last year, launching a locally-developed and manufactured 350cc model CB 350, Honda Motorcycle & Scooter India (HMSI) forayed into the middleweight, leisure-riding classic bike category, thereby positioning itself as a direct rival to Royal Enfield. The company sold more than 18,000 units of the model in 4-5 months despite limited pan-India availability.
“We study competition, we understand what they are doing, and we don’t copy. We do something entirely different,” Lal had said last year.
