Royal Enfield-maker Eicher Motors in overseas sales push
Mumbai: Eicher Motors Ltd plans to export vehicles to Southeast Asia and Latin America as it builds on record sales at home.
The Indian maker of Royal Enfield, the World War II-era British motorcycle owned by stars including Brad Pitt, is predicting more demand in emerging markets for mid-sized bikes with an engine capacity of 250cc to 650cc as people become more affluent, managing director Siddhartha Lal said in an interview. Eicher, which acquired control of Enfield India in 1993 and revived the almost-bankrupt unit, is seeking to increase the share of revenue from two-wheelers from 16% of the $1.2 billion it reported in the year to 31 December 2012, he said.
“Mid-sized bikes are ideal for these markets as they are reasonably fuel-efficient, maneuverable and not too much more expensive,” Lal said in his office located in Eicher headquarters in Gurgaon near New Delhi. “There are markets that aren’t conducive to big bikes and the mid-sized market is underserved.”
The company is planning to expand the motorcycle business after reporting the best quarter at its Enfield unit, where sales rose 45% in the three months ended March. Eicher, which earns the remaining 84% of its revenue from trucks it makes in partnership with Volvo AB, said a key gauge of its profitability beat all local rivals in 2012 amid the slowest pace of economic growth in a decade.
The former Tonight Show host Jay Leno and musician Billy Joel are also among the owners of Royal Enfield, according to their official websites. The British military used the bikes, including the ‘Flying Flea’ designed for parachute drops with airborne troops during the Second World War.
Royal Enfield, which makes the Rs.1.5 lakh 500cc Classic and the 350cc Thunderbird, saw sales jump 52% year fueled by demand from a rising middle class in India’s biggest cities.
Exports, catering to custom orders from buyers seeking to own a piece of history in countries such as the US, UK and Australia, accounted for 2.9% of the motorcycle maker’s 124,270 unit sales in the year ended 31 March, according to data from the Society of Indian Automobile Manufacturers.
“There’s a gap in this segment as vehicles like BMW and Harley Davidson are all above 600cc,” said Mukesh Saraf, an analyst at Spark Capital Advisors in Chennai. “If other Indian manufacturers like Bajaj are able to export, then Royal Enfield can do as well. There’s no way to gauge the potential of the mid-size segment both abroad and in India.”
‘Like a gun’
Bajaj Auto Ltd, India’s second-biggest maker of motorcycles exported 1.29 million motorcycles, or more than 33% of the 4.78 million it produced in the year ended March. The Pune-based company sells motorcycles ranging from the 100cc Discover to the 220cc Pulsar.
With its heritage as a weapons maker and ‘Made like a gun’ as tag line, Royal Enfield started in the 1890s making bicycles, lawn mowers and motorcycles in England. Since the 1940s, the company hasn’t much altered the technology in the single- cylinder engined two-wheelers except for modern features such as direct fuel injection and switch ignition.
The bike maker will introduce a new model, a 535cc ‘cafe racer’ called the Continental GT this year, while planning two more platforms for future variants, Lal said, without elaborating.
The company last month opened its first new motorcycle factory in almost six decades, that can build 150,000 units annually. That capacity will be expanded to 250,000 in 2014, as Eicher looks to pare waiting lists that average 8 months, Lal said. Lal expects deliveries to jump 39% to 175,000 units in 2013.
The Enfield motorcycles are more for enthusiasts than for people who need vehicles to do their daily chores, which means Harley-Davidson Inc.’s lower-end bikes could pose a challenge for the Indian maker in these markets, said Mahantesh Sabarad, an analyst at Fortune Financial Services India Ltd in Mumbai.
“There’s a potential in these markets, but it will take a long time for them to build their brand,” he said.
Royal Enfield, whose Classic fitted with a sidecar featured in the movie Harry Potter and the Deathly Hallows: Part 1, says its master plan involves eventually building 500,000 motorcycles annually.
The company has its products planned for the next 10 years, Lal said without elaborating, as Eicher targets more customers beyond Delhi, Mumbai and Bangalore.
“Now, we’re firing on all cylinders,” says Lal. “To me, what’s relevant is that in the top 10-15-20 mid-size motorcycle markets in the world, we must be No. 1 or No. 2.”
First Published: Mon, May 20 2013. 08 44 AM IST in the “Live Mint & The Wall Street Journal 5/20/2013 http://www.livemint.com/Companies/Dt2jA34Gsdum7hR5OP6HzN/Royal-Enfieldmaker-Eicher-Motors-in-overseas-sales-push.html
Getting ready to ride the Royal Enfield Cafe Racer at the new Royal Enfield factory
I stopped in at the new factory last week to preview and ride the final version of the Cafe Racer on the test track at the new Royal Enfield factory. The Cafe Racer is the worst kept secret in the industry. I cannot reveal much about the final form other than it was a lot of fun and you will note my picture is not that revealing (drat!). I will say that we are on track for 2013 deliveries and we will reveal more about the technical aspects of the bikes soon.
The new factory was fabulous! It is a wonderful 50 acre, mix of absolute state of the art manufacturing and where it counts traditional hand craftsmanship . The environment was also much better for the workers – quiet, clean, safe,good temperature control, ergonomic assembly positions etc. It is amazing what you can do with a brand new clean sheet of paper facility. For the first time I noticed women in the good paying assembly line jobs. The owner has a goal of having 50% women in the new factory which would be great. Not as easy as it sounds in India but a good goal for certain.
For 2013 we will manufacture 175,000 units, up from 25,000 units just a few years ago then 250,000 in 2014. Virtually all of these units are presold already with some small exceptions in the export market where dealers carry inventory. (In India there is at least an 8 month waiting list). By way of comparison Triumph is said to have a current capacity of 50,000 units per year.
The addition of the Cafe Racer this year will now give us 4 distinct Royal Enfield products to sell.
Royal Enfield prepares for its next level of global growth: Commences commercial production from the Oragadam manufacturing facility
Royal Enfield’s capacity for 2013 to be 175,000 motorcycles
The first new bike - A Desert Storm completes production at the new Royal Enfield factory opening a new era
Chennai, April 30, 2013:
Royal Enfield today started commercial production from its new manufacturing facility at Oragadam, Tamil Nadu India. Spread over 50 acres, the Oragadam plant starts with an installed production capacity of 150,000 units in the first phase. An initial investment of Rs 150 crores has been made towards construction of this facility that will produce the full range of Royal Enfield motorcycles.
Rolling out the first motorcycle from the Oragadam facility, Mr Siddhartha Lal, MD & CEO, Eicher Motors Ltd. said, “At Royal Enfield we have recorded a major milestone today with this plant at Oragadam becoming operational. Royal Enfield has witnessed a huge surge in demand in the recent past, recording a growth of over 50% for each of the last two years. We have been extremely successful in stretching the capacity of our existing 60 year old plant to record levels – achieving production of over 12,000 motorcycles in the month of March 2013. Yet the demand for our motorcycles has continued to outpace the supply. Therefore we have conceived of this new facility on a much larger tract of land and created a master-plan that can take the eventual production here to over 500,000 per year. With the speedy execution of the first phase of the plan, we have revised our production target upwards in 2013 – to 175,000 motorcycles from both plants. However, even as we start commercial production today, we have already begun working on the second phase of expansion at Oragadam, which will further increase the production capacity to 250,000 motorcycles in 2014. With this new facility, we now have the ability to scale our production quantity quickly in response to market demand.”
“This new plant has been benchmarked to achieve the highest level of quality and productivity. We have re-tooled many of the parts that make up our motorcycles – so that they are of exacting accuracy and finish. The substrate quality of the sheet metal parts, for example, is now at par with the best in the world; when these parts undergo the world-leading CED and paint process here at Oragadam – they will have a surface finish and life of the highest quality”, he further added.
Talking about Royal Enfield’s future plans Mr Siddhartha Lal said, “The ability to increase capacity fast and superior quality of motorcycles is a crucial step for Royal Enfield towards meeting our global ambitions. While we are adding new models and new dealerships in the Indian market which is fuelling our growth, we are also working on building our presence globally. Higher investments into brand and distribution, as well as new products that are very appealing to international markets are going to be key for us to achieve global leadership in the mid-size motorcycle category.”
The construction at the plant commenced in February 2012 and with civil work continuing around the clock, it was completed in a record time of 11 months. In addition to increasing capacity, the Oragadam plant has been designed to optimize cost of production through relevant automation while retaining the human craftsmanship that is distinct to the iconic Royal Enfield motorcycles. Towards this, an absolutely path breaking new CED paint shop with a painting capacity of 600 motorcycles per day has been installed in the plant. Further, to ensure consistency and less wastage, a robotic painting system and powder coating system have also been added. At the same time, processes such as the legendary pin-striping continue to be done through craftsmen who lend that special human touch to each motorcycle. The vehicle assembly line at Oragadam comes with several features such as ergonomic assembly work stations, torque controlled tools with feedback device and a capacity of producing one motorcycle a minute, or over 800 per day on two shifts. Effective controls and process, right from material handling to review mechanisms, have been created on the backbone of a modern and strong IT infrastructure. In addition, chassis dynamometers and a 1.4 kilometer test track within the factory premises allows for the motorcycles to be thoroughly tested before they are dispatched for customers.
The Oragadam facility has been built with sustainability in mind from the very beginning of the design stage with several initiatives such as reduction of effluent generation at source and zero liquid discharge system of treatment. In addition conservation of resources such as electricity, water and fuel has been given top priority. Even during the construction stage, the green concept was applied such as using soil from within the site for filling, as well as using the ideal quantities of steel, concrete and cement. The focus was also on creating efficient work spaces, equipment and utilities and hence effective use of natural, diffused lighting, natural air flow inside plant and 25% of wooded area have been ensured.
About Royal Enfield:
The oldest motorcycle company in continuous production, Royal Enfield made its first motorcycle in 1901. A division of Eicher Motors Limited, it has been a pioneer of powerful four stroke technology since 1955 in India. With its manufacturing base in Chennai, India, the company offers a variety of models catering to the needs of motorcycling enthusiasts.
Royal Enfield’s product line‐up includes the Bullet, Classic and Thunderbird models in both 350 and 500cc displacements. Royal Enfield operates through 11 company-operated stores and 250 dealers in all major cities and towns. Royal Enfield motorcycles are exported to over 40 countries across the world including the USA, Japan, UK, several European and Latin American countries, as well as the Middle East and South Asia.
Royal Enfield also organizes and supports many enthusiast activities, events and rides across the country, more prominently the Rider Mania – an annual gathering of Royal Enfield riders from all over the country and the Himalayan Odyssey, the largest motorcycle ride over some of the toughest roads and highest mountain passes in the region of Himachal and Ladakh.
The 8th annual Royal Enfield reunion will be held the weekend of June 14-16, 2013 at Eagle Cliff Campground in Lanesboro Minnesota. There will be a $30.00 per person registration fee. The registration fee will cover 2 nights of camping, breakfast and dinner on Saturday and relaxing evening campfires. Check in starts at 3:00 on Friday. There will be a motorcycle ride on Saturday. Please contact Jane at Classic Motorworks (800-201-7472) to make your reservation. We welcome all models of bikes.
0% Financing for 12 months or 5.9% financing for 60 months
Plus Free replacement wear parts for any purchase of a new 2010, 2011 or 2012 model Royal Enfield purchased on or after 3/15/2013/. See your dealer or go to the Royal Enfield Finance Center for program details, restrictions etc.
The promotional parts offer includes certain parts that are considered wear parts and are excluded from the standard 2 year warranty provided by Royal Enfield.
It is provided and sponsored by Classic Motorworks the US distributor of the Royal Enfield and not sponsored by Royal Enfield itself. This wear parts promotion runs concurrently with the factory warranty. Its term is the same as the warranty in your Royal Enfield owner’s manual. It is only valid on new unused, previously unregistered 2010, 2011 and 2012 models of Royal Enfield. A certified new demo bike sold by a dealer is eligible. The warranty is only valid on units sold on or after March 15, 2013 until this promotional period ends.
The items covered are brake pads, brake shoes, clutch plates, cables, bulbs, and electrical switches. This is a wear parts offer and any labor required to install these parts must be paid for by the customer. All repair work including filing of a warranty claim must be done by an authorized Royal Enfield dealer.
The wear items mentioned above will NOT be replaced if they are part of incidental damage from another incident; Examples are an accident, bike tipped over, fire etc. Parts are not eligible for replacement if the wear is determined to be caused by abuse. Wear parts included in this offer will only be replaced once. The determination that the parts are worn and need replacement will be made by any authorized Royal Enfield dealer. If parts are not worn beyond factory specs they will not be replaced, A broken cable, burned out light bulb etc. are self-evident but items like brake pads and clutch plates will have to be inspected by a Royal Enfield dealer.
The offer is also not valid if the underlying Royal Enfield factory warranty has been voided. Examples are machines that have been used in racing, for any commercial activity, ridden off road, lack of scheduled maintenance etc. These exclusions are clearly laid out in the RE factory warranty in your owner’s manual. The offer expires when the Royal Enfield factory 2 year warranty expires.
Royal Enfield To Showcase Cafe Racer Motorcycle At Long Beach Motorcycle Show 2012
Original Source: Royal Enfield To Showcase Cafe Racer Motorcycle At Long Beach Motorcycle Show 2012 from BikeAdvice.in (India based biker email publication.
Royal Enfield, the name synonymous with iconic retro looking motorcycles of the Eicher group will be showcasing its Cafe Racer motorcycle at the upcoming Long Beach Motorcycle Show December 7-9 2012. This motor show will take place from 7th to 9th December 2012. You all might remember that Royal Enfield had showcased a prototype version of the Cafe Racer motorcycle back at the 2012 Delhi Auto Expo held in January. Although, at that time no plans of whether to actually make it into a production unit were revealed by the company officials, it was very much understood that they might be bringing out one soon.
Recently, according to a recent forum chat on Royal Enfield Motorcycle website, one of the members claims to have seen the motorcycle in flesh. According to his post, it seems the production version is nearly ready. The production model however seems to have done away with the Ohlins suspension at the rear in favor of Paoli and adjustable rear seats. That was expected going by the fact that the company has to keep the price value low to make it appealing to the customers. The front suspension seems to have been kept intact.
Underneath, it is rumored to get a 535cc power unit. Apparently, this number was etched on the tappet cover. The 535cc engine would be a Unit Construction Engine (UCE) developed by Royal Enfield. The last motorcycle to be powered by a 535cc engine in the Royal Enfield product line-up was the Lightning 535 whose 535cc engine churned out 25 BHP of peak power and 38 NM of torque. (older style of engine) The 535cc unit might be a perfect engine being employed by the company however, with some extra tuning to bump up the power and torque figures to make it properly appealing like a Cafe Racer.
Note from Classic Motorworks – The Cafe Racer was shown at the Dallas IMS show recently . It will next be seen at the LA show on December 7-9 2012. VP of Classic Motorworks and Industry veteran Ron Greene will be at the show to answer all of your questions The bike is stunning and what is shown is a pre-production unit but pretty much as it will be in it’s final form. The silencer may have to be adapted to the US market but the design team has worked out something that will be pleasing.
It will be a 535 cc Unit Construction Engine. The 535 mentioned in the article was a variant of the old iron barrel engine and was produced for a short while in the early part of this century. (2000 – 2002 or so)