Eicher Motors, the manufacturer of Royal Enfield motorcycles, is driving the growth in the premium motorcycle segment (above 150cc) in the domestic market as the company’s market share in the segment has increased by 500-600 basis points (bps) in a year.
In the June quarter of the current year, the volumes of the Royal Enfield motorcycles have increased a whopping 44% to 1,94,832 units. The performance of Royal Enfield is commendable as the motorcycles are above 250cc which comes at a higher price range.
This is unlike Bajaj Auto, the leader in the premium segment which sells most of the bikes in the 150cc range. The waiting period of 4-5 months for the Royal Enfield products are indicative of the high demand and robust growth in volumes in the future.
“We believe there is a limited evidence of meaningful revival in the premium segment demand excluding Royal Enfield. We expect only gradual growth in the premium motorcycle segment without Royal Enfield and the segment declined by 6% y-o-y in the first quarter of FY16 without volumes of the company. Royal Enfield market share increased from 14% in Q1FY15 to 21% in Q1FY16,” said a UBS report on the company.
Eicher Motors has outperformed all competitors in the segment with its expanding volumes and market share. The Delhi-based company is expected to increase its production capacity by 50,000 units a month to deal with the steady rise in demand for the products.
The significant jump in the domestic sales has come on the back of a strong performance of three models — classic 350, Bullet Electra Twin Spark and Bullet 350 Electra Twin Spark.