Global push: Royal Enfield seeks to rev up sales in Latin America, East Asia

Motorcycle maker Royal Enfield is looking to push sales in Latin America and the South-east Asian markets to rev up its global play...

By: | Updated: March 21, 2016 12:30 PM

Royal Enfield

In India, sales have spiked up by around 60 per cent to 3,24,055 units in the last financial year, Royal Enfield has a market share of 3.5 per cent. (Reuters)

Motorcycle maker Royal Enfield is looking to push sales in Latin America and the South-east Asian markets to rev up its global play, after an initial market diversification strategy that focussed largely on developed markets such as the US, the UK and Japan.

The bikemaker’s aggressive global push comes in the wake of a sharp 45.14 per cent that it clocked in international sales last fiscal, albeit on a low base. Overall motorcycles sales in the domestic market grew by a tepid 2.50 per cent last year.

Royal Enfield CEO Siddhartha Lal indicated that the company, which ships made-in-India bikes to 50 countries worldwide, is working on expanding its distribution, after-market and spare parts network to boost volumes in the 250-750cc segment in these new markets. It has put together a strategic team to drive its international business and is conducting extensive surveys to gauge consumer preferences and build brand experience across geographies.

“The big play is in emerging markets. We have set up two exclusive stores in Colombia and have plans to add 3-4 more outlets by the end of the year. These do not have a typical retail environment but are aimed at inculcating our brand experience. Colombia is a starting point, we will focus on Latin America and Southeast Asia. We want to emerge as a significant player in all the markets we are in,” Lal said.

He said that in every market Royal Enfield enters, there are broadly four stages of evolution. In the first stage, the company is aiming at emerging as a significant player in the 250-750 cc segment. The second step is to make inroads in the mid-weight space; the third to grow the size of the mid-weight segment and lastly to emerge as a significant player in the entire motorcycle market.

In India, sales have spiked up by around 60 per cent to 3,24,055 units in the last financial year, Royal Enfield has a market share of 3.5 per cent. However, the fact that overall motorcycles sales in domestic markets grew by a mere 2.50 per cent in the same period puts the firm’s growing popularity among motorcycle enthusiasts in perspective.

Exports currently constitute a small proportion of Royal Enfield’s sales of 331,170 units (2014-15). But has been growing at a fast clip. In the last financial year, international sales scaled up 45.14 per cent to 7115 units. Going ahead Lal sees immense opportunity : “Globally, one million heavy-weight and 50 million commuter motorcycles are sold every year. You would think that sales of mid-weight bikes would figure somewhere in between but it is only one million per annum. The market for mid-sized bikes is apparent and ready for disruption. We want to make a deep impact.”

A former Harley Davidson manager Rod Copes has been roped in as president of North America; Pierre Terblanche, head of the industrial design team, has been brought in from Ducati; and James Young, head (engines), from Triumph hired in UK. Simon Warburton, head product planning and strategy (new projects) also comes from Triumph. Mark Wells, head programme (new projects) and Ian Wride, from design firm ‘Xenophya’ have joined the firm at its UK tech centre.

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