MUMBAI: With new competition breathing down its neck, Royal Enfield – the maker of the iconic Bullet motorcycle is preparing itself with an aggressive product onslaught to protect its turf. The company has over 15-20 product actions under consideration for the coming 3-5 years.
Royal Enfield on Friday launched the all new 350 cc cruiser motorcycle Meteor codenamed J1D, which is just the starting point of the company's new RE 2.0 mid-term plan. The company could potentially launch one motorcycle every quarter over the next 3-5 years. The Classic and Bullet replacement on J platform should hit the roads within a year and there is development work going on new architectures of Q and K including R&D work on EVs.
“We had a tremendous successful run over the past decade. But what got us here, is not necessarily what will take us ahead,” said Vinod Dasari, chief executive officer, Royal Enfield. “We need to significantly expand our product range. We will go an inch wide and a mile deep.”
The sharp focus remains on the 250-750 cc motorcycle segment and Royal Enfield will bring out more iterations of adventure, street, classic, cafe racer and sporty motorcycles in the future.
Dasari says “We are very good at what we do, so I am not worried about competition. More competition is good for us actually, keeps us on our toes.”
Already companies like Honda, Bajaj-Triumph, TVS-Norton and Hero MotoCorp-Harley Davidson have set their eyes on 8 lakh units 350-500 cc motorcycle segment, where Royal Enfield is an undisputed king with over 90-95% share.
Along with the launch of the Meteor 350, Royal Enfield introduced Make It Yours - MiY - initiative, an inventive and unique motorcycle personalization tool.
A prospective buyer can tap into thousands of possible personalisation combinations when they order their motorcycle via the Royal Enfield App, on the website or at a dealership. The MIY app is fully integrated, an order placed on the app will be received straight at the factory. This will help the company at the back end in the form of lean inventory and it will also be able to participate in post vehicle purchase with personalization feature, which could improve its average realization as well as operating margins.
The wait is over. Presenting the all-new Meteor 350. Get ready to create stories at every mile when you explore the… https://t.co/DmlU3vHOIY— Royal Enfield (@royalenfield) 1604643708000
At the end of FY20, the company’s average realization stood at Rs 130,128 per vehicle, a growth of 6.2% YoY mainly driven by the higher prices of vehicles due to the new emission norm.
The expanded portfolio will help Royal Enfield in reducing its over dependence on Classic 350 and stay technologically relevant in the mid-sized motorcycle market as competition intensifies.
Until recently, over 85% of the company’s total sales came from the Classic 350 motorcycle. That has now reduced to about 60%, Dasari said.
The Meteor 350 which has been developed grounds up replaces a successful Thunderbird nameplate and the company is confident of doubling its monthly volumes from the new cruiser motorcycle to about 10000 units.
This comes as a respite for the company as its sales recovery did not mirror that of the wider market during the festive season. However, that was due to the company’s conscious decision to keep system inventory low, Dasari said.
At the end of October, the company had an order book position of 80,000 motorcycles while it had an inventory of just about 30,000 units at its factories and with its dealers.
“We are not pumping the pipeline. It makes no sense to me to do that,” he said referring to the practice of building stock with dealers in preparation for high demand during the festive season. “If it’s a genuine Royal Enfield customer they will wait for some time and that demand will not go away,” he said.
While there have been trends of customers opting for more affordable vehicles in some segments after the pandemic in order to spend less, Dasari feels that the premiumisation in the two-wheeler segment continues. That’s crucial for the company as it positions itself as a premium alternative to commuter motorcycles.
“I’m sitting on more than a month’s booking. The highest backlog I have is on the Himalayan and the Twins and these are the more expensive motorcycles. Premiumisation is happening. People are wanting bikes,” he told ET.
The company’s core clientele has been relatively less affected financially by the pandemic, he said.
Cruise through the open road on a motorcycle that’s truly a reflection of you. Personalise your Royal Enfield Meteo… https://t.co/S3DSMxbPPP— Royal Enfield (@royalenfield) 1604651400000
"While motorcycle personalisation has grown enormously over the last decade, the options available to create a personalized purchase experience are practically nonexistent. We've changed that. Our production team has worked diligently on developing new manufacturing systems at our world-class Vallam Vadagal plant, and has come up trumps with an intuitive, frictionless ordering system," he added.
The company said customers booking a Meteor 350 will simultaneously be able to opt for Annual Maintenance Contracts (AMC), extended warranty and roadside assistance, all with flexibility built in to suit the requirements of the rider.
The new Meteor 350 adds to Royal Enfield's legacy of cruisers beginning in the 1990s with the Citybike, followed by Lightning and Thunderbird.