After years of impressive growth, it seems made-in-India manufacturer Royal Enfield is finally starting to slow down.
For almost 10 years, Royal Enfield has been the talk of the motorcycle industry due to its impressive sales growth. After constructing new manufacturing facilities, the manufacturer went from being a small-volume niche company to a serious player on the global market.
However, while its bikes are becoming more popular all over the world, the home market is still the most important one for Royal Enfield. And, with the whole Indian automotive sector slowing down, Royal Enfield’s been caught up in that slump.
In the April-to-June financial quarter of 2019, Royal Enfield saw its profit drop 21.6 per cent when compared to the year before. Its total revenue was down 7 per cent, and earnings down 24 per cent. In July, the company saw its monthly sales drop below 50,000. It’s the first time sales have been that low since May, 2016. For comparison, while Royal Enfield sold around 48,000 motorcycles this July, it sold 67,000 bikes last July.
Multiple factors are being blamed for the slowdown, mostly to do with India’s economy. However, it’s also worth pointing out that despite Royal Enfield’s recent introduction of its 650 cc twins, and the Himalayan before that, it’s still got a fairly limited lineup. Also, there’s increasing competition in India, as manufacturers from other countries are getting their own in-country manufacturing figured out, enabling them to sell motorcycles in India at lower prices, competing much more easily with Royal Enfield.
What’s Royal Enfield going to do? There’s plenty of buzz about a new, low-cost model coming from Royal Enfield. Royal Enfield is also continuing to work hard at pushing into new countries, and developing new retail stories in India to boost consumer interest.