After Mercedes-Benz, is Royal Enfield next to experiment with the direct-to-customer sales model?

In this work-from-home, digital-driven era, buyers prefer vehicles to be delivered at their residences and companies seem happy to oblige.

June 21, 2021 / 07:31 PM IST
In the case of Mercedes-Benz, its dealers will not go out of business once the direct-to- customer plan takes effect.

In the case of Mercedes-Benz, its dealers will not go out of business once the direct-to- customer plan takes effect.

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

The concept of selling vehicles directly to customers may be gathering steam in India with Royal Enfield now contemplating a relook at its distribution strategy.

The maker of leisure bikes acknowledged that customers increasingly want to buy vehicles from the manufacturer and get it home delivered.

Last week, luxury car market leader Mercedes-Benz said it will start selling vehicles directly to customers before the end of this year. This will allow the German automobile giant to dictate product prices and a better management of its inventory.

No automotive company with the exception of Citroen has tried selling vehicles directly to customers. About 20 percent of Citroen's C5 Aircross SUV have been booked online.

“Slowly but surely there is a change that is happening where the people want to buy directly from the company, delivered straight to home. So, in the long run I have to say we will need to relook at our distribution strategy overall,” said Vinod Dasari, CEO, Royal Enfield speaking to analysts.

Close

Eicher Motors-owned Royal Enfield has a network of 2,056 dealerships across 1,750 locations, as at the end of FY21, according to disclosures made by the company.

These include 1,025 regular stores and 1,031 small format stores called ‘studio stores.’

In comparison, Mercedes-Benz has around 100 dealerships in India.

With such a wide national reach, Royal Enfield stated that it has already achieved the network expansion planned for. “Other than one state, we are practically covered with the network expansion plan we had,” Dasari added.

Over the last one year, Royal Enfield, which makes motorcycles under the brands Classic, Himalayan, Interceptor, Continental GT and Meteor, accelerated its digital engagement with its target customers where it launched a mobile application and also allowed buyers to heavily customise their motorcycles of choice.

"Last year, we focused on fast-tracking digital projects and invested in building a hassle-free and engaging digital ecosystem to unlock enhanced brand experience with the swipe of a screen. We built the Royal Enfield App facilitating easy discovery, purchase, ownership, and services of motorcycles, as well as Make-it-Yours, a first- of-its-kind motorcycle personalization experience,” Dasari told Moneycontrol.

Because of constant advancements in technology, automakers can adapt to changing consumer preferences and manage their production and inventory in a much better way than before.

Companies can withdraw and launch new colours and engine and fuel variants of vehicles faster than before.

“We are constantly working on integrating our in-store and online experiences and will continue to have a judicious mix of physical and digital brand touchpoints for our customers," Dasari explained.

In the case of Mercedes-Benz, its dealers will not go out of business once the direct-to- customer plan takes effect.

In fact, as per the German luxury brand, the engagement of its dealer partners in the vehicle sale process will be more streamlined as their primary task would be customer acquisition and brand promotion.
Swaraj Baggonkar
first published: Jun 10, 2021 10:21 am

stay updated

Get Daily News on your Browser
Sections