Royal Enfield plans assembly operations in Nepal, Bangladesh, to strengthen international presence: CEO B Govindarajan

Motorcycle maker Royal Enfield plans to strengthen its international presence, including setting up of assembly operations in Nepal and Bangladesh, to expand its global footprints, riding on the back of record exports last fiscal, according to CEO B Govindarajan. The company, which is present in over 40 countries in the middleweight motorcycle category of 250cc to 750cc, is banking on its existing products and “a slew of new products lined up” to enhance its share in the markets and segments it is present.

“We feel there’s a huge potential for Royal Enfield to gain market share more and more in all the markets where we are present,” Govindarajan told PTI.

In the North American region, where the company started its journey with its own subsidiary in the last couple of years, it has gained a market share of almost about 8.1 per cent, he said adding in the APAC region it was mostly about 9 per cent and EMEA (Europe, the Middle East and Africa) region it almost touched about 10 per cent.

He said the gain in market share has been on the back of the company’s J-Series “super-refined engine” which first came in the ‘Meteor’ and subsequently in Classic and then in Hunter models.

“It is actually getting us a new set of consumers across the globe because everybody feels the quality levels of Royal Enfield are outstanding and it is at an accessible price point,” he added.

While he did not elaborate on the new product plans, Govindarajan said the company would look at the “adjacent segments” of its existing models. The company has been witnessing 20-25 per cent growth in the international markets in the last five years. For 2022-23, Royal Enfield posted record exports at 1,00,055 units in FY23 as compared to 81,032 units in FY22, up 23 per cent. It also registered a 39 per cent growth in total sales at a record 8,34,895 units as compared to 6,02,268 units in FY22.

When asked about international plans in the new fiscal year, Govindarajan said, “Our focus now is on North America, Latin America, APAC region, Bangladesh and Nepal and Europe.”

He further said, “We will also be looking at the SAARC countries. We could not do some numbers (last fiscal) only because of the legislation.”

The company is in process of setting up assembly plants in Nepal and Bangladesh as it cannot export its fully built motorcycles from India to these countries due to legislations, Govindarajan said, adding these would be done through local partners.

On the timeline for setting up the assembly plants, he said for Nepal the company expects to have the plant in the ongoing fiscal but for Bangladesh, it may take a bit longer. At present, the company has assembly units in Argentina, Colombia, Thailand, and Brazil.

Apart from statutory requirements, he said another reason for setting up assembly plants for completely knocked down (CKD) units in international markets is to be closer to the consumers and instil confidence in the company for the long term to them.

“We feel that in the long term, if we have to be there in those markets to grow, the way is that we have to have a CKD facility also in that,” he said.

Besides, having assembly operations in global markets has also helped in supply chain development and sourcing of local components.