ROYAL ENFIELD TRYING TO DOMINATE 250-650CC GLOBAL MARKET

Royal Enfield is doing well for past few years, and now they are looking to become a global leader in the 250-650cc bike segment. The Royal Enfield , which is owned by Delhi-based Eicher Motors, is one of the smallest bike makers in India by volume, but now the company is exploring the developed markets such as the US and Europe to power its global ambitions. Royal Enfield is the oldest company in the country to manufacture bikes, and it is a reckoned manufacturer of cruiser bikes globally, it presently exports motorcycles to the US and Europe from India. Recently, Hero MotoCorp and Bajaj Auto, the volume players of the Indian market has ventured into new markets like Africa and Latin America in an attempt to capture bigger share globally; while these two chose emerging markets Royal Enfield is willing the same by developing markets.

Business Standard recently spoke to Mr. Siddhartha Lal, Managing Director & CEO, Eicher Motors, who said, "We want to be a global leader in the mid-size category. We believe we can become a leader over the 5-10 years. We have started planning for this. We have built a world class facility whose quality is on par if not the best. We aim to have a significant share in each country in the mid-size category."

"Traditionally the development countries like the US and Euorpe have been the markets for us and they will continue to be important markets but biggest growth is emerging markets where people are looking at upgrades", added Lal.


In the Indian market, Hero, Honda, Bajaj dominate the entry level segment while Japanese players like Yamaha, Honda, Suzuki rules the mid category whereas BMW, Ducati and others rule the premium segment. Royal Enfield is doing well in the domestic market, but export figures are not that great only 3 percent of overall sales, which as of last year stood at 113,000 units. With the commissioning of a new plant at Oragadam, Chennai the company hopes to take the export share to at least 10%.


The Oragadam plant has an initial installed capacity to produce 150,000 units annually, which will be extend to 250,000 units per annum by 2014 in the second phase. Royal Enfield is also expanding its older plant as well, so that the annual production can reach at 500,000 units in the next few years. With the increased production capacity, Royal Enfield is also expecting better sales and its sales estimate for the year and hopes to sell 175,000 units as against 150,000 units estimation earlier.