New Delhi: Royal Enfield, the motorcycle brand of Eicher Motors, is preparing to bring its first electric motorcycle in India in the next two years.
“We are testing the prototype and we have put together a team to look into the commercial side of this business. Our product is two years out,” Siddhartha Lal, managing director & CEO, Eicher Motors, said while talking to the media post the Q1 earnings call on Thursday.
The automaker has lined up a capex of about INR 1,000 crore for 2023-24, with a part of it aligned for developing products and sales infrastructure for EVs.
B Govindarajan, CEO, Royal Enfield said the company has already hired around 100 people for the electric vehicle space.
It is in the process of setting up a production capacity of 1.5 lakh EV units and is “in full speed of execution”. To begin with, it is planning a production capacity of 1.5 lakh units in a modular form.
Aims to hold 80% market share in long share
Royal Enfield has been dominating the premium motorcycle segment in India with the Classic and Bullet models. Currently it holds about 90% share of the market above the 250 cc motorcycle segment.
Last month, Bajaj-Triumph launched two 400cc models in India namely Speed 400 and Scrambler 400. Harley Davidson also introduced the X440, developed with Hero Motocorp.
Commenting on the growing competition in the mid-size motorcycle segment (250 to 750 cc), Lal said, “At 90% there is only one way the market share could go, that is south with new competition coming in. But we are okay with that. We are many steps ahead of the competitors. We believe that we will be able to hold on to 80% share in the medium to long term.”
He added that increasing competition should contribute to the growth of the mid-size motorcycle market. When there are new offerings in the market, there is new excitement and the good part is that the overall market is bound to grow, expected to be up from 1 million units to about 1.5 to 2 million units in the coming decade.
Robust sales performance in Q1
Eicher Motors reported a growth of 50% for its consolidated net profit to INR 918 crore for the first quarter ended June 30, 2023. The company had reported a net profit of INR 611 crore in the April-June period of last fiscal.
Total revenue from operations increased to INR 3,986 crore in Q1 FY24 as against INR 3,397 crore in the corresponding period of last year.
“Q1 has been significant for Eicher Motors as both Royal Enfield and VECV have registered their best ever first quarter performance, and have recorded tremendous growth,” Lal said.
“As we continue to strengthen our product portfolio we have some really exciting and amazing motorcycles being launched in the forthcoming quarters,” he added.
Royal Enfield sold 2.2 lakh motorcycles in the first quarter, marking a growth of 21% from 1.86 lakh units in the year-ago period.
Globally, the mid-weight motorcycle maker inaugurated its fifth CKD assembly unit outside India in Birgunj, Nepal. Spread over 1-lakh sq ft, the Local Assembly Unit is aimed to give a boost to the company’s business in the SAARC region.
VECV, a joint venture between the Volvo Group and Eicher Motors, also recorded its best-ever first quarter. It sold 19,571 units as compared to sales of 17,469 vehicles in the April-June quarter of the last year.
Vinod Aggarwal, MD and CEO VECV said, “While the CV industry of 3.5T and above grew by 0.5%, we have outperformed the industry growth resulting in improvement in our market shares.”
