Rising competition from companies like Hero MotoCorp, Bajaj Auto, and TVS Motor Company in the middleweight motorcycles segment over the last few months has had negligible impact on Royal Enfield's volumes, Eicher Motors Limited MD and CEO Siddhartha Lal told reporters in a post-earnings conference call on May 11. Eicher Motors Limited (EML) is the parent company that owns the Royal Enfield brand.
Lal added that growing competition from other players (250-750 cc models) has not just expanded the market, but has increased focus on the premium motorcycles segment.
“All our metrics, such as queries, bookings, etc., have continued to improve. With greater competition, there's greater understanding and awareness of what Royal Enfield brings to the table,'' he said.
Royal Enfield, which has products such as the Himalayan, Meteor, Bullet, Classic, Interceptor, Shotgun, etc., currently dominates the 250-750cc motorcycle market with 85 percent share of the business.
With a virtual monopoly in this market for many years, the company has of late faced competition from the Triumph Speed 400 and Scrambler 400x (both made and sold by Bajaj Auto), Harley Davidson 440X (made and sold by Hero MotoCorp), Hero Mavrick 440, and the Bajaj Pulsar 400.
“Competition is important. When we started this journey in 2010, the size of the 250cc-plus market was less than 1 percent in India. Now the size of that market is roughly sub-10 percent (of the total two-wheeler market), which is still a small part of the overall market. If that market goes to 20 percent, and we still have the kind of market share that we do today, that is great. We want to grow the market and new entrants will help us do that,” explained Lal.
In FY24, RE sold 9,12,732 units, up 9 percent from 834,895 units sold in FY23.
Lal said the company posted record numbers despite new launches by the competitors. “As you can see, we're selling better than ever before, despite the competition. So that's not of any immediate concern,” Lal asserted.
Asked if the Royal Enfield Guerrilla 450 will be brought in take on the competition, Lal maintained, “We have lots of interesting motorcycles planned, I obviously can't tell you what's coming when,” and added that the company plans to grow its premium two-wheeler segment at double the rate of the industry.
“We don't want to compromise on growth. We want to grow rapidly and faster than the industry. That's our ambition. To grow faster, maybe even at twice the industry's rate of growth in the long term,” said Lal.
Lal said EML will invest Rs 1,200 crore in Royal Enfield by way of capex in the current financial year.
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