Iconic bike maker Royal Enfield is targeting a 10% market share in the mid-sized motorcycle (250cc to 750 cc) segment in export market. The company has started its first offshore completely knocked-down (CKD) plant in Argentina in September last year and plans to set up three more plants in Thailand, Brazil, and Columbia, according to analyst firm Motilal Oswal, based on the latter’s interaction with the company’s management. The company has already crossed the 10%-market share mark in Korea and Australia.
In an investor presentation in February, the company said only the mid-sized motorcycle segment has grown in the recent past in the global motorcycle industry and its ambition is to lead this category. Royal Enfield said it was evaluating opportunities to set up CKD facilities in priority markets in APAC and LATAM regions. The company sees great opportunity in the international mid-sized bike market. The success of 650 twins reinforces confidence in the company’s export strategy. It is expected to grow further with new launches such as Meteor and improved international product quality. The company plans to launch its complete portfolio globally in due time, the analyst note said.
The Eicher Motor company has a strong pipeline for the next five-seven years, with a new launch every quarter. Meteor was the first product launched in November’ 20 and the new Himalayan was launched in February’21. It is banking on strong brand equity, product launches, and exports for growth as it aims to become a $5-billion global company. The company’s plan is to have 100 exclusive stores by the end of FY21 in the entire export markets.
Despite continuing downturn in many of the global economies due to the pandemic, the company in February had clocked 94% growth in its exports. It exported 4,545 units in February 2,021 as against 2,348 units in February 2020.
Royal Enfield sold around 65,114 units in February 2021 in domestic market, posting 6% growth, as compared to 61,188 units sold in February 2020.
According to Motilal Oswal, the company is working on debottlenecking its production. It has acquired land near its Vallam plant in Tamil Nadu to shift some operations like machining to increase capacity utilisation. Demand is back to pre-Covid levels at Royal Enfield and is expected to improve going forward on the back of new launches, and ongoing expansion in international markets, it added.
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