The new Harley-Davidson is the most affordable product from the stable of the cult American bike maker, which will directly rival the Royal Enfield Classic 350 – the best-selling sub-500 cc roadster in India, while also challenging other similarly priced roadsters. Interestingly, Harley-Davidson, a videshi brand, will challenge a desi brand that has gone global, selling its motorcycles across continents.
Royal Enfield enjoys a brutal dominance in the mid-weight category in India. Will its throne shake when Harley-Davidson is challenging it in its own den?
Battling in a vrooming market
The entry of Harley-Davidson in the mid-weight category (>250cc-750cc) comes at a time when the premium market is on fire. While India’s overall two-wheeler market has been depressed for the past few years, mainly due to the pandemic and also rising inflation, the premium market has been growing, with the country accounting for half of the two million mid-size motorcycles sold annually the world over.
Sales of motorcycles with engine capacities ranging from 250cc to 750 cc rose by 38% last fiscal, more than double of the overall two-wheeler category, shows data from the Society of Indian Automobile Manufacturers.
While demand for entry bikes has remained subdued amid weak consumer sentiment in rural markets, that for premium bikes has witnessed strong recovery among the young after the pandemic, with aspirational buyers looking at purchasing two-wheelers not just for daily commute but the whole experience of motorcycling, which includes rides, community, merchandise, accessories and connected technologies. This is prompting two-wheeler makers into action in this category. Honda Motorcycle & Scooter India and Bajaj Auto are set to launch nearly a dozen mid-weight bikes over the next few months, challenging the dominance of Royal Enfield Classic and Bullet which have been long-time favourites on Indian roads.
But the biggest piece of action is the impending battle of Harley-Davidson with Royal Enfield, the two most iconic heritage brands in India, who will bump into each other in the same category for the first time.
How Royal Enfield emerged as a timeless brand
Originally British and eventually part of the Indian-origin Eicher Motors from the 90s, Royal Enfield, known for its long-time champion Bullet motorcycle, continues to hold the proud badge of the oldest global motorcycle brand in continuous production.
The brand’s physical home is Chennai; its birthplace, Redditch, in the UK; and its spiritual homes in Goa and the Himalayas, as Siddhartha Lal, MD, Royal Enfield had once told ET. Its vehicles were used by the British War Department during the world wars and subsequently it has been a sizable supplier to the Indian army, which accounts for nearly 7% of the company’s revenues.
Royal Enfield motorcycles have earned a legendary status in the world of motorcycling, captivating riders with their iconic design, distinctive thumping sound, and a rich heritage that spans over a century. With a steadfast focus on creating classic motorcycles that evoke nostalgia while embracing modern engineering, Royal Enfield has carved a niche for itself in the global motorcycle market.
During the 1980s, the Indian motorcycle market witnessed the rise of Japanese manufacturers, which introduced more fuel-efficient and affordable motorcycles such as Hero Honda. Royal Enfield faced tough competition, and the brand struggled to adapt to the changing market dynamics.
However, in the early 2000s, the company underwent a significant transformation. Royal Enfield was acquired by the Eicher Group, and the brand underwent extensive restructuring. This marked a turning point for Royal Enfield, as it embarked on a journey to revive its iconic status and reclaim its position in the Indian motorcycle market. The launch of the Royal Enfield Thunderbird Twinspark 350 in 2008 marked a crucial milestone for the brand. This model introduced several modern features and appealed to a new generation of riders. Royal Enfield’s renewed focus on product development, quality improvement, and customer satisfaction gained traction, resulting in a resurgence of the brand.
In subsequent years, Royal Enfield introduced several successful models, such as the Classic, Bullet, Himalayan, and Interceptor. These motorcycles showcased a harmonious blend of classic design cues with modern engineering, captivating motorcycle enthusiasts across India. Royal Enfield’s motorcycles became synonymous with a unique retro charm, evoking a sense of nostalgia and adventure. Recently, it unveiled the 2023 versions of the Interceptor 650 and Continental GT 650 in India. The Interceptor 650 and Continental GT 650 have garnered a lot of love from riders all across the world.
Royal Enfield has become a market leader with more than 90% share in the premium middle-weight motorcycle segment (>250cc-750cc) in India, which has other players too such as Triumph and Honda.
Cruising the continents
Royal Enfield is also making its presence felt in the global mid-size motorcycle segment by breaking into the top 3 to 5 rankings in the markets of the UK, Europe, New Zealand and Southeast Asia. The company’s international volume in the last fiscal year doubled, with exports accounting for more than 15% of the total output of the company. It now has a mid-term target of garnering about 20-25% of the volume from international markets.
Its secret of global success is that it has started becoming a strong alternative to expensive brands in several matured markets, thanks to its new range of products. Its global success has been possible due to Eicher Motors building a global portfolio tailored to suit individual market needs and creating robust assembly units and distribution infrastructure.
Royal Enfield has over 150 exclusive stores and more than 660 multi-brand outlets in over 60 countries. It has set up assembly units in Thailand, Argentina, Brazil and Colombia with plans to set up one more in Brazil and new ones in Nepal and Bangladesh.
How brand philosophies differ
Though Royal Enfield is known as the desi Harley-Davidson, they have different brand philosophies that appeal to different types of riders. Royal Enfield focuses on capturing the essence of classic motorcycling, blending vintage aesthetics with modern engineering. The brand cherishes simplicity, reliability, and the joy of the open road. On the other hand, Harley-Davidson embodies the spirit of American freedom and individualism. It promotes a lifestyle centered around the thrill of riding, camaraderie, and the pursuit of adventure.
Motorcycle offerings
Royal Enfield primarily offers motorcycles in the mid-weight category. The brand’s lineup includes iconic models which feature retro-styling and evoke a nostalgic charm. Royal Enfield motorcycles are known for their affordability, ease of maintenance, and the authentic experience they provide.
Harley-Davidson, on the other hand, focuses on heavyweight motorcycles, typically above 750cc. Their lineup includes models like the Street Glide, Fat Boy, and Road King, which feature powerful engines, bold styling, and an unmistakable American vibe. Harley-Davidson motorcycles are renowned for their robustness, customization options, and the distinctive rumble of their V-twin engines. This is the first time Harley-Davidson is entering into the mid-weight category with an affordable model.
Harley-Davidson poses a credible challenge
Apart from being an iconic brand loved all over India and across age segments, market leader Royal Enfield has an extensive network of dealerships and service centers across India, providing easy accessibility for customers and ensuring efficient after-sales service. It is a deeply entrenched player in India which makes it impossible for any foreign player to even consider the idea of challenging its might.
But Harley-Davidson will be riding on the gargantuan and equally entrenched network of Hero MotoCorp.
The newly-launched X440 will be sold through Harley-Davidson stores and select Hero 2.0 outlets to offer a premium experience to customers. Hero plans to open 100 premium outlets by the end of the current fiscal year. The biggest challenge will be to maintain the blended operating margin with bikes having a relatively lower volume than its core product portfolio while providing the Harley product quality at competitive rates on a sustainable basis, ET has reported.
It is also entrusted to take care of service and parts requirements for Harley bikes. It has the mandate to sell Harley accessories and general merchandise, riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and its existing sales network in the country.
“Harley is an aspirational brand, and consumers in the 350 cc segment will find this pricing very attractive,” said Nomura Financial Advisory in a note. “While we await real-world feedback for the product, it ticks all the right boxes on paper to make it successful,” Motilal Oswal Securities said about the X440.
Royal Enfield not just rules the mid-weight category but has also virtually created it from scratch, which makes it the ruler of an empire it has built for itself. Despite the immense pull of the Harley-Davidson brand in today’s globalised consumers in India, it will be difficult to eat into Royal Enfield’s market share. Yet, a long-term partnership with local biggie Hero Motocorp which promises more such affordable models, the iconic “potato-potato-potato” rhythmic sound of Harley-Davidson will reverberate deep into the Indian market.
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