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Chennai-based leisure biking specialist Royal Enfield is looking to become a global leader in the segment which it operates in over the next 5-10 years, a senior company official said today.
The company, which is one of the smallest bike manufacturers in India, owned by Delhi-based Eicher Motors, is exploring growth beyond the developed markets such as the US and Europe to power its global ambitions.
Royal Enfield, which is readying the launch of Continental GT (formely called Cafe Racer) shortly is working on several new products for the emerging markets that would equally complement its existing range.
Siddhartha Lal, Managing Director & CEO, Eicher Motors, said, "We want to be a global leader in the mid-size category. We believe we can become a leader over the 5-10 years. We have started planning for this. We have built a world class facility whose quality is on par if not the best. We aim to have a significant share in each country in the mid-size category."
Being the oldest surviving motorcycle making company in India, Royal Enfield makes bikes, styled for comfortable cruising with an engine capacities ranging from 350cc-500cc. The company presently exports motorcycles to the US and Europe from India.
However, just as volume players Bajaj Auto and Hero MotoCorp are venturing to Africa and Latin America in search of growth opportunities Royal Enfield is also shaping its future products keep in mind these developing markets.
"Traditionally the development countries like the US and Euorpe have been the markets for us and they will continue to be important markets but biggest growth is emerging markets where people are looking at upgrades", added Lal.
Primarily companies like Hero, Honda, Bajaj to name a few are present in the entry level segment (below 200cc) while Japanese players like Yamaha, Honda, Suzuki dominate the mid category (upto 800cc) whereas BMW, Ducati and others rule the premium segment (above 650cc), internationally.
Exports presently constitute just three% of Royal Enfield's overall sales, which as of last year stood at 113,000 units. With the commissioning of a new plant at Oragadam, Chennai the company hopes to take the export share to at least 10%.
The new plant built at a cost of Rs 150 crore crore has an initial installed capacity to produce 150,000 units annually, which is being scaled up to 250,000 units per annum by 2014 in the second phase. With additions done at its older plant too the company hopes to stand at an annual production rate of 500,000 units in the next few years.
With demand upbeat for all Royal Enfield products the company has made an upward revision in its sales estimate for the year and hopes to sell 175,000 units as against 150,000 projected earlier. By the end of next year it hopes to achieve sales of 250,000 units.
