Motorcycle manufacturer Royal Enfield, part of Eicher Motors, has set up a local assembly unit and CKD facility in Nepal as the company continues to strengthen its presence outside India.
Set up in collaboration with the Triveni Group, the Nepal assembly unit — which has just commenced operations — will be the company’s fifth global CKD assembly unit in three years. The new facility is expected to boost the company’s business in the SAARC region.
During the Q4FY23 earnings call of Eicher Motors, the management indicated that the company was evaluating opportunities to set up CKD facilities in priority markets in APAC and LATAM regions. In Brazil, it crossed the milestone of assembling more than 5,000 units.
The local assembly unit, spread over one lakh sq ft in Birgunj, will have the capacity to assemble 20,000 units per year. To begin with, the facility will engage in the local assembly of the new Classic 350 and the Scram 411.
“The local topography of Nepal provides the ideal setting for our kind of motorcycling. We will expand our retail network from 18 to 35 touchpoints across 30 cities over the next year,” said Yadvinder Singh Guleria, Chief Commercial Officer, Royal Enfield.
Nepal 2-W market
The motorcycle market in Nepal is on a rebound journey, and Royal Enfield sees huge potential for the market to grow substantially. In the pre-Covid period, the motorcycle segment in Nepal was nearly 1.7 million units per year, with almost 60-65 per cent of that being motorcycles sold in the above 150cc premium segment.
With the market expected to grow at 10-15 per cent in upcoming years, Royal Enfield believes that the trend of premiumisation of motorcycles will only increase and help the company grow its volumes.
International business contributed about 15 per cent to Royal Enfield’s revenue in FY23, up from about 4 per cent in FY19.