Royal Enfield is slowly expanding its range of motorcycles. It is a well-known motorcycle company and has its presence over the entire world. With its new 650cc bikes – the Interceptor 650 and Continental GT 650 – soon to be available for purchase, Royal Enfield is open to the idea of assembling its bikes in Vietnam and Thailand.
RE motorcycles are quite popular across the globe, and South East Asia is no exception. To extract more from this market, and to expand its market share, RE is interested in start assembling its motorcycles here.
Speaking about this, Siddhartha Lal, MD & CEO, Eicher Motors said, “We are extremely bullish on Thailand and Indonesia. We have seen very good traction for Royal Enfield bikes in these market. We will have market companies with our own employees working there, where distribution will be done by us but dealers will be local. The idea is that it should be followed by local assembly but we are looking at different options.”
Now, establishing a separate manufacturing plant in a new market is a really expensive affair. Instead, RE is eyeing to get contract manufacturing into the picture. All the parts and kits will be exported from India, and the contractors would assemble them into complete products.
Mr. Lal shared his views on this, “Preference is to do contract manufacturing rather than make the bikes ourselves. From the taxation point of view, it makes sense to do assembly (then export fully-built units from India). If it works we could have something in Vietnam too.”
Currently, exports make up just for 2.3 percent of the Royal Enfield’s annual sales. Last year, just under 20,000 units were exported on a combined sales of 8.2 lakh units. However, growth in exports has been robust for the brand with last year’s growth being 25 percent over the previous year.
RE would need to do something to increase the production. This new idea looks worth checking out. Anyway, we are still awaiting the new Twin 650cc motorcycles to hit showrooms here in the UAE.