Renowned bike manufacturer, Royal Enfield, is reportedly planning to expand its reach in several emerging markets. In an effort to become a major player in the overseas mid sized motorcycle segment, the company is eyeing various global regions like Latin America and Southeast Asia. Riding on the back of Continental GT bike, Royal Enfield is assessing all its options of offering products worldwide as the recent launch has been applauded by many critics.
Speaking on prospects of Royal Enfield, Chief Executive Officer, Siddhartha Lal said, “We believe the mid-sized motorcycle segment is between 250cc and 750 cc, so that's the space we want to play in as Royal Enfield. We believe that this market is totally under-served. We believe the market is going to move up from small bikes to mid-segment. Nobody is focusing on this segment, so that is the market we want to get into at global level."
He stressed on the fact that the mid-size capacity segment for bikes in Latin America and Southeast Asian countries holds good growth potential in near future. According to Lal, the mid-sized motorcycle segment account for almost 8 lakh units per annum, globally. While in India, the figures for same segment bikes fall in the tune of 2 lakh units.
Further divulging details about the markets that Royal Enfield would enter first, Lal said “In terms of scale, it is going to come from some of the developing markets. So the first market we are ambitious about selling is Latin America. We are going to commit to the market."
The newly launched Continental GT is available for sale in major European markets including United Kingdom. In the coming weeks, deliveries are expected to start in United States, after which the same shall follow in Australia and Japan. It is being said that Continental GT has been instrumental in shifting the focus of Royal Enfield to expand its reach in overseas markets.
Putting forward his ambitions for the bike market, he said, “We want to be number one or number two in every market in the mid-sized category, so that is our ambition in the 250cc-750 cc segment. Now, we don't just want to participate in the number of countries. Our ambition is very clear that we are going to make strategic inroads into the international markets." Commenting on the future line-up of products for Royal Enfield, Lal said, “Now we have the capabilities, we have the confidence, have cash to spend and business model which works and we are making money, so now we can invest on new platforms and new products."
It must be noted that Royal Enfield presently exports only 3 per cent bikes that are manufactured at its facilities in Tamil Nadu. In order to meet the rising demand for its models, Royal Enfield is planning to increase production capacity as waiting period on some models have reached a period of 6 months. Reportedly, the company is assessing its options to invest in the Oragadam facility, which is a part of the expansion plans in 2014. At present, the current output of Royal Enfield is close to 1.75 lakh bikes, which is expected to increase up to 2.5 lakh, once the expansion process gets completed.
Royal Enfield is aiming to expand its dealership and service network in India in order to reach the target figure of 300 dealerships in near future. Over the last three years, the bike manufacturer has registered a growth of 50 per cent, which is expected to increase in coming years.
