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Motorcycle manufacturer Royal Enfield Motors is planning a massive retail expansion in India and abroad to boost its sales, amid challenging domestic marketing conditions.
The company, which is part of Eicher Motors, is planning a major expansion of its studio stores. These are unique compact stores offering sales, service and spares. They have been set up to provide greater accessibility to sales and spares in tier-2 and tier-3 towns. Also, such stores have helped improve the image of the brand in these locations.
Domestic expansion
This October, the company opened 500 studio stores across the country, which are selling 8-10 motorcycles a month. The stores are already operating at their break-even levels (8 motorcycle sales/month). Royal Enfield plans to add 200-300 such stores by the end of March 2020, the company management said at the 2QFY20 conference call.
“The response to the studio stores has been great, and we are already working to widen our presence over the forthcoming quarter,” Vinod Dasari, CEO, Royal Enfield said last week.
The company witnessed double-digit growth in its retail sales during the festive season. November retails have been better, though it is early to make any remarks. Due to the festive season, sales were higher in the northern, western and eastern regions of the country. Apart from that, the establishment of studio stores have helped boost sales up-country.
During October, total sales of its above-350 cc bikes zoomed to 7,707 units compared with 2,967 units in October 2018, while sales of 350 cc and below bikes fell 5 per cent to 64,257 units (67,484 units).
Royal Enfield Motors is also looking to tap the pre-owned motorcycle market and has opened its vintage stores across nine locations —– Chennai, Bengaluru, New Delhi, Mumbai, Patna, Kanpur, Indore, Patiala and Hyderabad. These vintage stores offer pre-owned, refurbished and restored motorcycles.
International ramp up
In October, the company’s motorcycle exports grew to 4,426 units compared with 407 units. Supported by a new range of bikes, the company has been recording rapid growth on the export front, reflecting Royal Enfield’s aggressive push into newer global markets.
After having successfully forayed into many export markets, the company is now looking to strengthen its distribution. It will increase exclusive international store count from 57 now to 80 over the next 12-18 months. Also, the company will ramp up its touch points in the US.
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