The recent two events – the launch of premium bikes at aggressive prices by Hero and Bajaj in collaboration with their respective global premium bike partners have created a lot of buzz in the market.

Industry analysts reckon that this time Royal Enfield’s dominance in the mid-segment of the premium motorcycle market (250cc-750cc) is likely to be challenged by the new products – Triumph Speed 400, a product out of joint development by Triumph and Bajaj Auto and Harley-Davidson X440, developed through a collaboration between Hero MotoCorp and Harley Davidson.

Royal Enfield Motors, part of Eicher Motors Ltd, has more than 90 per cent market share in the mid-segment premium motorcycle market in the country. In India, about 72 per cent of its buyers are in the age group between 18 and 35 years. Also, the company’s presence and volume growth in small towns is strong.

All three domestic two-wheeler majors – Hero, TVS Motor and Bajaj – attempted to improve their share and presence in the premium bike categories. But TVS Motor managed to crack it to some extent with its in-house-built Apache Series bikes in the sub-250cc segment.

Also, before Hero-Harley and Bajaj-Triumph partnerships, TVS Motor, in collaboration with BMW Motorrad, attempted to make its mark in the above 250cc category with its 310cc platform of bikes. But Royal Enfield’s inexorable march continued, while the new bikes could dent the sales of the Siddhartha Lal-led company.

Market trend

However, of late the market trend has been favourable for high-end bikes. Premiumisation has been gathering pace in the Indian motorcycle market due to rising income levels, a growing young population and a shift in their preferences, and numerous product launches. Thus, an increasing number of buyers now opt for high-end bikes. This has prompted motorcycle makers to come out with more products in the higher cc segments.

Amid the numerous premium bike launches by various players over the past several years, Royal Enfield’s dream run continued. Also, the company kept the sales momentum with regular new launches, particularly in the last 5-6 years.

Presently, Royal Enfield garners the bulk of its volumes from its bikes in the 251cc-350cc category, while it has gradually been growing the volumes in two other high-end categories with new product roll-outs – 351cc to 500cc and 501cc to 800cc.

Growing challenges

251cc-350cc is a key segment in the high-end bike market with an annual volume of more than 7 lakh units. This category makes up about 90 per cent of the above-250cc market and Royal Enfield’s key turf where the brand remains unchallenged.

Triumph Speed 400 and Harley Davidson X440 are coming in the category that clocks an annual volume of little over 50,000 units now, down from 70,000 plus in FY18.

However, analysts at Kotak Securities reckon that aggressive pricing of Triumph Speed 400 and Harley Davidson X440, as well as the strong brand recognition of Harley Davidson and Triumph, will challenge the hitherto dominance of Royal Enfield in the above-250cc bike segment in the coming years.

As per their calculations, the current price (ex-showroom) gap between Royal Enfield’s bikes (Classic 350 and Meteor 350) and Speed 400 and X440 is just ₹20,000 plus. This aggressive pricing is expected to lure more buyers from Royal Enfield’s core category.

Well, the above-250cc motorcycle segment will see more intense competition in the coming months. But, it remains to be seen whether the two new bikes would be able to make a deep dent into the volumes and market share of Royal Enfield as projected by the analysts.

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