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After 45% sales growth in Q1 of 2015, Royal Enfield has set a growth target of 50% for the whole year and is now seeking to replicate the success globally. Siddhartha Lal, MD & CEO, Eicher Motors, in an exclusive interview with R Ravichandran, says the company is looking to launch a slew of motorcycles on its new platform. Excerpts:
<br>Q: Royal Enfield has reported stupendous sales growth of 44.5% in the first quarter (January-March). What’s driving this growth?</br> <br>A: Our order book continues to remain strong and would continue to be that way for months. Given the robust orders in hand, the company is now producing approximately 35,000 motorcycles, the highest ever. Moreover, we have been expanding footprint at a steady pace in India, adding 6-8 dealerships a month. That is starting to increase now. The demand for Royal Enfield modern classic bikes in the 250cc -750cc range continues to grow.</br> -
You have also seen encouraging growth on the export front. We continue to invest in brand marketing in overseas markets. The company opened flagship stores in the two biggest cities of Colombia, Bogota and Medellin, where Royal Enfield has already received tremendous response. Royal Enfield has appointed new distributors in Australia, Spain and Dubai. Exports are catching up and the company is growing at around 50% on the exports front as well.
<br>Q: You were talking about two new platforms with a multiple product strategy, wherein you will introduce new bikes from 2016 onwards. Please elaborate.</br> <br>A: Royal Enfield’s growth is steep, in line with its aim to become the global leader in the mid-size motorcycle segment. To achieve this, the company is working on new platforms and multiple products of 250-750cc that will fuel growth in coming years. All new products in the next three to five years will be in the 250-750 cc category.</br> 
<br>Q: What is the potential market size for the 250-750 cc category (in India and abroad)? Where do you want to be in terms of numbers and market share?</br> <br>A: The current size of the global mid-sized motorcycle segment is 1-1.2 million units per annum. Royal Enfield has pioneered the mid-sized segment in India and right now it has over 97% market share in the segment. We aim to become the segment leader globally. </br> -
The company is already being prepared for big global play and that strategy will play out over the next 10 years. Royal Enfield’s ambition is to drive international strategy in a manner that will help attain the same inflexion point internationally that it has attained in India.
<br>Q: You have recently increased production. What kind of utilisation do you see going ahead?</br> <br>A: Royal Enfield announced that capacity for in 2015 will be close to 450,000 units, which is 50% growth from 300,000 units in 2014. The company has a very strong order book and the capacity will be utilised well, if growth in the first quarter is anything to go by.</br> -
The company is laying the foundation at present — distribution, aftermarket network and brand equity. That way, monthly output would go up from 30,000 units to 50,000 at the Oragadam plant.
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The company has announced two new technology centres. The bigger one is in Chennai. The second, a satellite tech centre, is coming up in the UK in Midlands.
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Royal Enfield has acquired a 50-acre plot at Vallam Vadagal, Chennai, which will prepare the company for future expansion.
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