Royal Enfield Motors, part of Eicher Motors, has presented a favourable growth outlook for both domestic and international businesses. While production constraints are expected to ease gradually in the coming months with the addition of new suppliers for semiconductors , international business continues to gather momentum with improving volumes and share in key markets.

“ Chip shortage has impacted our operations in Q3. We are working towards developing an alternative supply ecosystem to minimise the effect. We have onboarded one more chip supplier while the third supplier is in the pipeline. This will ease supply chain issues,” B Govindarajan, Executive Director, Royal Enfield Motors, said during the company’s Q3 earnings call.

Robust demand

However, the company sees robust demand with new launches. Its new Classic 350 motorcycle, launched in September 2021, has seen a tremendous response and the company has rolled out more than one lakh units so far. As a result, its market share in the above-125cc segment increased to 27 per cent in the December quarter compared to 25 per cent in the year-ago period. Its market share in the overall two-wheeler segment is 9 per cent.

“Consumer preferences for personal mobility and premiumisation continue to drive demand. With supply chains issues gradually easing out, we expect further production scale soon,” he said.

Meanwhile, its strategic transition from an Indian brand to a global brand in the mid-size motorcycle market (above 250cc to 750cc) continues to show impressive progress. “In Q3, not only did we commence CKD operations in Thailand, which is a promising market for us, we also registered stellar growth in international volumes, which grew by more than 57 per cent,” said Siddhartha Lal, Managing Director, Eicher Motors.

For April 2021-January 2022 period, the company more than doubled the sale of motorcycles outside India at 64,807 units compared to 28,192 units in the corresponding period of last year, helped by new launches and an expanded network.

In a reflection of its success in international markets, the company has hit a market share of 7.1 per cent and 5 per cent in Europe and the US respectively, in the mid-size bike segment.

The company is also evaluating opportunities to set up CKD units in its priority markets in the Asia Pacific and Latin American regions. It currently has CKD units in Argentina, Colombia and Thailand.

During the December quarter, it opened seven exclusive stores and 11 multi-brand outlets across many countries. Its global network comprises 45 exclusive stores and 529 multi-brand outlets in developed markets (Europe, UK, U.S and UAE) and 111 exclusive stores and 138 multi-brand outlets in developing markets (the Asia Pacific and Latin America), according to company data.

The company plans studio stores, shop-in-shop for apparel and motorcycle displays to increase customer reach in addition to network expansion in key developing markets.

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