Eicher Motors launched Royal Enfield Bullet 350 in September 2023, celebrating its 90-year-plus legacy. With that, Eicher Motors, maker of iconic Royal Enfield motorcycles transitioned all its high volume models from unit construction engine (UCE) model platform developed in 2009-2010 to a J-series. The company recently launched Himalayan 450, the adventure bike. Eicher Motors stock price has fallen 7% since its wholesale volumes data was released on January 1, 2024. The reason being 10% YoY fall in the December 2023 wholesale volumes of its 350cc category which accounts for about 85% of total volumes. The 350cc category includes popular models such as Hunter 350 cc and Bullet 350 cc launched last year in November 2023. The recently launched Himalayan 450 cc falls in the above 350 cc category (12.5% of total volumes) which increased 11% YoY in terms of wholesale volumes in December 2023. Since September 2023, wholesale volumes are on a subdued trail except the festive season jump in November 2023. So has the competition got better of Royal Enfield. Competitive pressure has definitely soared with the entry of Harley Davidson, Triumph and TVS Apache RTR 310..
Speaking on competition, Siddhartha Lal, Managing Director and Chief Executive at Eicher Motors said, “At best we see that if there is a couple of competitive bikes that are not as shabby as they have been previously, then maybe they’ll help us grow the market. And we are a 90% player in this 350 cc plus market.” He further added that increase in competition increases growth in market size, which will benefit Royal Enfield, even if the company loses a couple of points of market share. “When you are 90%, eventually there’s only one place to go. It’s not that we’re going to give up market share, but at 90%, you’re not going to gain too much market share”, said Lal. Royal Enfield is the market leader in middle weight (250-750cc) in India. The company is feeling the heat from high competitive intensity since the launch of Harley Davidson and Triumph-Bajaj Auto bike launched last year. Royal enfield’s retail sales volumes as FADA data also fell 2.6% YoY in December 2023.
Only premium, nothing massy about Royal Enfield bikes
Royal Enfield is working on a slew of products to be launched in the near future. “On the 350, 650 cc platform itself, there are new products, and variants which as an organisation we are working. That’s why we said that there are a slew of new products and the pipeline is full.” While competition is increasing in the middle-weight segment, the company is not ready at all to explore in the 250cc and below category. Speaking on entering the basic commuter segment, Lal said, “We don’t plan to be in any basic commuter or that kind of stuff. So, we’re not in a game for basic mass products. We always aspire to be in a premium product and product which has a lot more meaning than just commuting to an individual.” And even electric motorcycles which the company plans to launch in the near future will only be in the middleweight segment. At the EICMA show, Royal Enfield unveiled a special project, known as the ‘Electric Himalayan Testbed’. The company normally takes 3-4 years for product manufacturing. True to its reputation a disruptive e-motorcycle is in the works. But so are all its major peers in the same electric space trying to bring out an electric disruptor.
