Royal Enfield has shown no domestic volume growth even at the end of FY2019, whereas other brands have shown 8 percent growth.
In April, Royal Enfield had a 21 percent decline in domestic volumes, this was the 6th time that the company was in this situation. Share price of the Indian manufacturer has also taken a hit by 23 percent since November. The company is looking to turn around their fortunes and prep their products for a comeback along with a BS6 revamp.
Vinod Dasari had been an Ashok Leyland employee for 14 years and has been made Royal Enfield’s CEO on the 1st of April. A new CEO and a tapered growth trajectory is an opportune time to look at Royal Enfield 2.0 and the route to take things forward as per an official at Eicher Motors.
An increase in insurance costs, tighter liquidity availability, poor buyer sentiments and the general elections have been blamed for the poor sales in the 2-wheeler market. The Chennai-based manufacturer has been playing with new products like the Himalayan but has not availed much success. The sales of the Classic 350 accounts for more than half of the sales of the company that has seen a demand stagnation.
Vinod Dasari will be running the company entirely and will be supported by Siddhartha Lal, MD of Eicher Motors, in areas where the brand currently lacks experience. The company expects the Continental GT and the Himalayan to push the growth of the brand along with the Classic 350 in the more mature markets in India. But in smaller towns, Classic 350 still pulls through with the demand.
Royal Enfield has managed to rack up the sales volumes of the 650 Twins to 2000 units by the end of April 2019. The company is exporting half the production of the two bikes despite the 4 month waiting period in India. Officials have also hinted at new products coming in at Royal Enfield and that the new regulatory changes have created an opportunity to imply on a few new changes that the company could not before.
Royal Enfield 2.0 Operations
– Appointment of a new CEO is a part of the new game plan
– The 650 Twins have garnered a good sales figure by the end of April
– Previously the company emphasised on the sales figures only, but they intend to make a few changes with the new opportunity presented to them
Source – MoneyControl.com