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Royal Enfield is bullish on growth prospects this year due to a strong order book, pent-up demand and a surge in exports.
Royal Enfield said it has two-three months’ order backlog, which will be catered to once the lockdowns are lifted.
“Demand is not an issue. We have a large backlog of orders. I think by the time production comes back after lockdown, we will also see strong pent-up demand,” Vinod Dasari, Chief Executive Officer, Royal Enfield Motors said during Eicher Motors’ Q4FY21 conference call. He expects things to ease from July and it won’t be difficult for the company to ramp up the production to 82,000 units per month. It has the ability to manufacture up to one lakh units /month. Production capacity of its new model, Meteor, was increased to 15,000 units a month from 8,000.
Dasari also confirmed that the company would launch one new model every quarter. We have an exciting pipeline of new products. Probably, this year, we will have the highest number of new model launches from the Royal Enfield stable.
Network ramp up
“In the past three years, the 500cc+ category bike segment has grown significantly in India as a percentage though it is not huge in the overall two-wheeler market. And the entire growth for this has come from Royal Enfield. We will continue to build the story and the brand in this segment with more products,” said Siddhartha Lal, Managing Director, Eicher Motors. Along with the new model introduction strategy, the company has also been ramping up its network. In FY21, it added a total of 535 stores, including more than 100 outlets of what it calls ‘main stores’ and more than 430 studio stores, taking the total number of outlets to 2,056 across 1,750 cities (from 1,200 cities a year ago).
More than half of the studio stores were opened in Uttar Pradesh, Madhya Pradesh, Rajasthan, Odisha, Bihar, Andhra Pradesh, West Bengal where Royal Enfield’s market share is lower than its India average.
In the international market, it plans to increase the exclusive stores from 132 in FY21 to about 175 by the end of this fiscal. In FY21, the company entered Japan, Cambodia, Costa Rica, and the Dominican Republic.
Royal Enfield garnered about 10 per cent of its revenue from international markets in FY21, up from about 4 per cent in FY19.
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