RE will bring three new models in the 350-450cc space within the next one year.
At a time when global premium motorcycle brands Harley Davidson and Triumph have made an aggressive pitch to eat into Royal Enfield’s core of midsize motorcycles, the maker of the Bullet has taken a series of new model interventions in anticipation of new rivals.
Our sister publication Autocar Professional learns that the company is reinforcing its 350-450cc segment with three offerings in less than a year. Apart from launching the all-new Bullet, internally codenamed J1B, in early September, Royal Enfield will be bringing in the all-new Himalayan (K1G) with a liquid-cooled engine in 6-8 weeks.
To further solidify its offerings and give options to prospective buyers, there is a 440cc Scram (D4K) under works, which is likely to be launched within a year. This will expand Royal Enfield’s line-up to over half a dozen different nameplates. Under its Classic badge, there is a bobber version also being worked upon.
Under its 350cc J-platform, Royal Enfield will have Classic, Hunter, Meteor and Bullet. To sit above that will be the Scram 440 and Himalayan 450 – thereby creating a formidable line up between Rs 1.5 lakh to Rs 2.5 lakh.
The expansion of the product line-up has been in the works for the last four to five years, well aware of the new competition from Triumph and Harley-Davidson, which were announced in 2019-2020.
Apart from protecting its core, Royal Enfield has also extended itself to higher cubic capacity and also expanded its geographic footprint to more markets globally. The R-platform based 750cc bike should be ready by 2025 and so will the electric L-platform, which are again initiatives that will help the brand to stay several steps ahead of the competition.
To support this, Royal Enfield has committed its highest-ever annual capex for the company in FY24 of Rs 1,000 crore, which will not only go into the new products but also into creating capacities to not lose out on any demand on account of lack of supplies. The company has acquired a fresh parcel of land in Cheyyar on the outskirts of its existing factory in Vallam Vadagal in Tamil Nadu.
“We had a very great year, but I must tell you, we also have an even better one planned, which we will see in time to come. And we have a very strong line-up of motorcycles for the year 2023-2024 and a robust plan of growth on the rebalance, which we have articulated,” B Govindrajan, CEO of Royal Enfield, told investors post FY23 earnings call.
Annually about 1 million units are sold in premium motorcycles priced over Rs 1.5 lakh or 250cc and higher, and Royal Enfield has a market share of over 75 percent. In the 350cc and above engine category, the market share swells to 85-90 percent.
While the overall market breadth has remained in the single digit growth range – the premium motorcycle segment has been growing in a strong double digit led by Royal Enfield. Its recently launched Hunter has been received well in the market place and the sales of the brand have already crossed 1-1.5 lakh units.
To be sure, while the Hunter has caught the fancy of younger buyers, it has impacted the sales of the Classic 350 – the core pillar of its volume growth in the last decade. The company will be banking on the new Bullet, Himalayan and Scram to bring in new buyers even as rivals Harley-Davidson and Triumph dip in the pie of Royal Enfield.
