Companies

On a roll, Royal Enfield Motors revs up production

G Balachandar Chennai | Updated on February 11, 2021

With good demand recovery, cuts the waiting period for some models

Royal Enfield Motors, part of Eicher Motors, has said it has ramped up production capacity in the past two months to cut the waiting period for its models, despite challenges on the supply chain front.

The company increased the production capacity to about 75,000 units a month in December and January as the company has seen demand recovery across the country.

During pre-Covid times, the top 20 cities accounted for about 37 per cent of the sales. But this fell to about 20 per cent during the first two quarters of this fiscal due to the lockdown. However, with the opening up of cities, their contribution has now reached 25 per cent.

Bookings are improving helped by its new bike Meteor and the capacity ramp up helped the company lower the waiting period for some of its models such as Bullet, Classic and Meteor. Meteor booking continues to trend at a much higher level than Thunderbird.

ECU shortage

The company has been facing shortage of Engine Control Units (ECUs). But for this issue, the company would have delivered more vehicles, Siddhartha Lal, Managing Director of Eicher Motors, said during the company’s Q3 conference call.

Helped by the capacity ramp up, the company sold about 70,000 bikes each in December and January. Overall bookings are stronger than last year and the management said even matured markets such as Tamil Nadu and Maharashtra are reviving.

The company continued to ramp up its distribution network during the third quarter with the addition of 43 large stores and 129 studio stores, taking the total number of outlets to 1,889 (covering 1,550 cities). It plans to add 600 stores in FY21 (368 added in the first three quarters). Meanwhile, exports have also bounced back with a double digit rise in the third quarter. The company continues to focus on Latin America and ASEAN markets.

Last month, it entered Japan with the opening of its first store in Tokyo to cater to the market for mid-sized motorcycles (250cc-750cc).

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Published on February 11, 2021
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