Royal Enfield is working on various electric vehicles, the first product will come in only by 2025: Siddhartha Lal, managing director, Eicher Motors
Sales of premium motorcycles are accelerating at twice the pace of entry-level commuter mobiles and will double in the next five years, mirroring the aspirations of the middle-class in an economy slated to become the third largest in the world shortly, said Siddhartha Lal, managing director, Eicher Motors.
Speaking a day before the launch of the iconic Royal Enfield Bullet on Friday, Lal said India already accounts for half the mid-weight motorcycles (250-750 cc) globally. “We saw (early on) that markets like India will become more premium with affordability going up,” he said. “We also saw that peak (performance) motorcycle had been reached in Western markets (where customers wanted lesser horsepower), the demographic was changing (people are getting older) and there was a bit more pressure on the wallets than in the heydays of the 1970s, ’80s, ’90s. So all that also pointed us to the fact that there people will be downsizing a bit in (Western) markets, like they’ll be upsizing in India.”
The mid-weight motorcycle segment – which Royal Enfield dominates in the country with more than 90% share – is in a “sweet spot”, said Lal, “We are seeing this as an opportunity to further grow the market. We have been able to grow it to about a million units. It will grow over twice the speed of the regular (commuter) market over the next 10 years. In the next five years, it could double,” he said.
Sales of motorcycles with engine capacity ranging between 250 cc and 750 cc increased to 791,878 units in 2022-23, 38% more than 574,675 in the previous year, more than double the overall two-wheeler category, showed data available with the Society of Indian Automobile Manufacturers (SIAM). Royal Enfield saw sales increase 41% to 734,840 units in 2022-23.
India’s leading two-wheeler makers such as Hero MotoCorp, Honda Motorcycle & Scooter India (HMSI) and Bajaj Auto are readying to drive in nearly a dozen mid-weight motorcycles over the next few months to challenge the dominance of Royal Enfield, which has long ruled roads with the Classic and the Bullet. Lal said while Royal Enfield takes competition “seriously” the priority for the company always remains to focus on the customer. “Others are more product-centric; what we have been able to establish is the entire ecosystem. We have a wide range of products and have more coming in. We are also going to markets outside which are virgin for us,” he said.
In the past three years, the company has seen international business picking up following the introduction of a Euro V compliant platform. Royal Enfield exported 100,055 units in 2022-23, an increase of 23% over 81,031 units sold the year before. The company said it is the leader in the mid-weight motorcycle segment in the UK (with a share of about 20%) and South Korea, and features among the top three brands in the segment in Thailand, Austria, France and Italy. There is a “huge market potential outside”, Lal said.
While demand for entry bikes has remained subdued amid weak consumer sentiments in rural markets, those for premium motorcycles has witnessed strong recovery with the easing of Covid-19 with young, aspirational buyers looking at purchasing two-wheelers not just for daily commute but the entire experience of motorcycling, including rides, community, merchandise, accessories and connected technologies. This, along with export potential, is prompting two-wheeler makers to make a beeline for the segment, said industry stakeholders.
Separately, Lal said while Royal Enfield is working on various electric vehicles, the first product will come in only by 2025. “We are working really hard but we are not in a rush. The idea is to come out with a product which will interest people and change the market. The plan is to be in (the segment) by 2025,” he said. The company is also open to partnerships in electric vehicles in the long-term, he said.
Royal Enfield had invested 50 million euros in Spain-based Stark Future in December 2022. The duo is working together on future products in electric vehicles. Lal, however, said electrification in the motorcycle segment will “take some time” due to challenges in terms of cost, weight and range. Internal combustion engine motorcycles will continue to exist for quite a long time, he said.
Keyword: Mid-size motorcycle segment in India is in a sweet spot, Royal Enfield to roll out e-bike by 2025: Siddhartha Lal