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Last Updated : Mar 17, 2016 11:31 AM IST | Source: CNBC-TV18

Base effect: Eicher says won't maintain 50% growth rate

Premium two-wheeler maker Royal Enfield today launched the Himalayan, a 410cc leisure motorcycle, that will retail for Rs 1.55 lakh (ex-showroom price).

Premium two-wheeler maker Royal Enfied today launched the Himalayan, a 410cc leisure motorcycle, that will retail for Rs 1.55 lakh (ex-showroom price).

For a company that has had a sizzling comeback over the past 10 years with its Bullet range of motorcycles, Siddhartha Lal, MD of parent firm Eicher Motors, says Royal Enfield's growth rate will slow down going forward.

Below is the transcript of Siddhartha Lal’s interview with Farah Bookwala on CNBC-TV18.


Q: What is the growth outlook going forward?

A: If you look at the numbers, we are projecting manufacturing to go around 9,00,000 by 2018, so that actually cuts our growth from the current 50-60 percent to more like 30-40 percent which is still a lot of growth.

Q: So are you saying that in the near-term 40-45 percent is the sort of equilibrium that you are going to maintain?

A: Who knows what happens in markets and we do not stress about that. We just get our heads down, do our jobs. So the road ahead looks like this, this is what the road ahead for Royal Enfield looks like. We have our existing products which are doing exceptionally well. The Classic, the Bullet, the Thunderbird.

They are doing marvellously, but we are going to add a new layer with the Himalayan. We are going to add more motorcycles next year and so that is how we roll. We keep moving forward.

Q: International markets, you started getting into that in a big way over the last few years and particularly in the last year, you have been accessing some of the markets in the Latin American area. Explain how those markets have been performing, especially your markets of Columbia, Brazil, those markets which you forayed into recently.

A: We have been present for a long time in the US, UK, Europe and they are going well for us. The international story for developing markets, which for us is basically a few markets in Latin America and a few in Southeast Asia, is where we are really putting our energies on for the long-term. It is a long-term job. It is going to take us the better part of a decade to become strong in those markets. That is the way we look at it. 

So, all of what we are doing is learning process, understanding. Markets are different, people are different, requirements are different, retail is different, all of that. So, having said that, we tool a huge step in Columbia, we took a lot of time, effort, we got a very good partner, we have got the pricing right in those markets, all of that and in the first full-year of Columbia, it has become our single largest market and we have been in some markets for 20 years which are bigger motorcycle markets.

So, it shows that if we have the right entire proposition in a market like Columbia, it even though we have not been present there in the past, it can respond really well.

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First Published on Mar 16, 2016 04:45 pm
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