Enfield has a secret code to take on Harley

MUMBAI: Global superbike makers Harley Davidson and Triumph have announced new, low-displacement bikes for emerging markets that will directly aim at the portfolio of Royal Enfield. So the Indian company that produced Bullet has chosen to respond by making its own range of big bikes, codenamed J, P, Q and K.Royal Enfield is today the most profitable two-wheeler maker in India with ebitda margins of over 30% and it has a market share of 90% in the 200-500 cc space, led by the Classic 350 model. Unsurprisingly, the global majors are targeting the mid-size segment of 250-700 cc. This will be the biggest product launch by Royal Enfield under the ownership of Eicher Motors. A dozen models are planned over next three to five years, offering a range of new bikes from 350 cc to 650 cc and above. Work is going on at the company’s UK development centre, with critical feedback from India.Five people in the know of Royal Enfield's plans spoke to ETfor this story, all off the record. Company spokespersons declined comment on specific plans. While the J architecture is aimed at protecting its domestic turf against the ensuing competition with the new generation BS-VI version of Classic, Thunderbird, Bullet, and Himalayan, the P architecture will produce the twin cylinder bikes Continental 650 cc and Interceptor 650 cc to help the company compete strongly against Harley and Triumph in global markets.ACQUIRING TOP TALENTBigger bikes will be made on the Q and K platform post 2020-2021. The Q architecture is aimed at Triumph Thruxton, whereas the K platform will come out with even bigger bikes above 600-700 cc. Royal Enfield is aiming to take its market leadership in the mid-size motorcycle space from India to the global stage. Both improved production facilities and acquiring top talent are in focus. Shubranshu Singh was recently hired as head of global brands. He comes with extensive experience from consumer and entertainment industries. Enfield is also talking to Vimal Sumbly, the former head of Triumph brand in India, to lead its Asia-Pacific business, which the company believes has the potential to be a big volume contributor in the future. It first hired the services of ex-Harley Davidson man Rod Copes a few years back to lead Enfield’s North American operations. Plus other executives from global motorbike makers like Triumph have been hired to develop these big bikes. Globally, mid-size bikes are less than 2%, or nearly 1 million, of the total 55 million market. The company will be targeting the segment particularly in markets such as Brazil and Latin America where the mid-size bike is contributing more than 5% of the total market.The company already has some presence in these markets. However, even as global expansion gains momentum, there is a question mark on Royal Enfield’s domestic sales growth. In mature markets like Maharashtra and Karnataka and even in Kerala, Eicher has been witnessing weakness for the last couple of years. The company is betting that the new generation Bullet, Classic, Thunderbird, and Himalayan will give it further leg in the domestic market. It will need that if J, P, Q and K are to rise against Harleys and Triumphs.

from The Economic Times https://ift.tt/2PkLsJz