Eicher Motors MD & CEO Siddhartha Lal has decided to relocate to the UK for a year to spearhead Royal Enfield’s global growth strategy. Lal will oversee the setting up of a new R&D-cum-tech development centre in the UK, apart from developing new products to cater to the global market.
In response to a query at a concall on Wednesday, Lal said: “I want to make Royal Enfield one of the top contenders in the global premium bike market. We have entered traditional markets, such as the US, Australia, the UK and Japan, and recently forayed into newer markets, such as Colombia and Dubai, in a small way. Our international sales currently contribute less than 5% to overall sales and I seek to make it big.”
Driven largely by Royal Enfield, Eicher Motors reported a 41% growth in net profit for the quarter ended June at Rs 221.8 crore against Rs 157.4 crore in the same quarter last fiscal. For the first time, Royal Enfield sales crossed the 1-lakh mark in a quarter to 106,613 units, a growth of 43.8% over the same quarter last year (74,132 units).
Profits from Royal Enfield alone stood at Rs 183.60 crore (up from Rs 133.20 crore), a growth of 38%. The turnover during the quarter grew 30% to Rs 2,916.70 crore from Rs 2,245.4 crore, of which Royal Enfield contributed Rs 1,097 crore in the quarter (up from Rs 746.2 crore), a growth of 47%.
Lal said: “Eicher Motors has continued its strong run and reported its best quarterly result. In the current quarter, Eicher Motors’ standalone business, Royal Enfield, reported its highest quarterly total income on the best ever unit sales. This resulted in quarterly Ebit of Rs 267.40 crore.”
On expansion plans, he said: “We have increased our monthly capacity from 30,000 bikes in January to 38,000 in June and, by December, the capacity will be increased to 50,000 units. We expect to bring down the waiting period substantially to five months.” The waiting period in January was nine months, he said.
The company has already earmarked Rs 500-crore investment for the current year, including on R&D centres in Chennai and the UK as well as for production and expansion of network. The company is also considering setting up one more plant near Chennai and would finalise the plans for the same next year.