Royal Enfield lost 44% of global sales in the first five months of the 2020, although the outstanding performance in the international activities. The manufacturer is booming in ASEAN and growing in Latam and in the most of European countries. However, the collapse of India industry, due to the long shutdown, dragged down the performance.
Global 2020 sales hit by Covi19 spread
Royal Enfield is a fast development brand and following the fast growth reported in India between 2012 and 2018, a deep strategy to grow sales in the international markets has been put in place.
In the first part of 2020, although the manufacturer is expanding the global distribution, its image and customer base, sales are declining sharply.
Year to date May sales have been 322.644, down a deep 44.3%.
Sales declined 44.9% in India, while boomed 94.6% in the ASEAN (thanks to Thailand and Vietnam expansion), improved 6.7% in LATAM, although the local industry is collapsing, thanks to Ecuador and Costa Rica, and lost only 9% in Europe.
In the 2019 Global Sales down 18% despite booming in Europe
In recent years, Royal Enfield scores have been impressive, benefiting from Indian market boom. Indeed, Royal Enfield is – by far – the leader in the mid-engine size motorcycles in this market. Looking at some figures, Indian sales for Royal Enfield grew up from 469.741 in 2012 to a record – the sixth in a row – of 846.000 in 2018.
Indian market’s development has always been of major importance for the brand. However, it has recently directed its attention on a more global level. A global expansion signifies differentiated risk without being fully dependent on the domestic market.
Limitations and drawbacks that comes from a single market dependence were evident in 2019 results. In fact, due to the first decline of Indian market in years, Indian global sales fell down a huge 18% at 713.000 units.
Indeed, year 2019 confirms the fear regarding the tight relationship between the company’s performance and the domestic market. After years of growth, India is losing substantial terrain in two-wheels domestic market, affecting Royal Enfield performance despite the outstanding growth of its international business.
Sales in India deteriorated by 19.2% and considering this market represents the 97% of total sales, the performance in other markets was not able to minimize the lost.
In the other markets, the trend was positively growing in all regions: +22% in ASIA ( China, Japan, Korea, Taiwan), +16.7% in North America (US, Canada and Mexico) and +82% in Europe, with sales booming in the United Kingdom (+221%), actually the second best market in the World, and in all markets, including Germany (+73%), France (+82%), Italy (+24%), Spain (+59).
Although the almost negative local industries trend, Royal Enfield is fast growing in South America as well, with Argentina +269% and Colombia +40%.
Royal Enfield is a company 100% controlled by the Indian conglomerate Eicher. Located in Chennai (India) is among the largest motorcycles company worldwide. The history of this company started at the at the beginning of the 20th century. Indeed, in 1901 Royal Enfield brought to the market its first motorcycles.
In 1949 K. R. Sundaram Iyer launches Madras Motors to import British motorcycles within India’s territory. Besides Norton and Matchless machines, he sells Royal Enfields.
In 1952 Madras Motors receives an order from the Indian Army for 800 350cc Bullets. At the beginning of 1953, the shipping arrived in India and they proved to be a great success because of their hardy and easy to maintain aspects. Johnny Brittain won the prestigious Scottish Six Days Trial on his 350cc Bullet, “HNP 331”.
In 1955 the Redditch company became partner of Madras Motors and they founded ‘Enfield India’. They engaged in the construction of a purpose-built factory at Tiruvottiyur, near Madras.
In 1956 the Tiruvottiyur factory opened and Bullets began to be manufactured under license. The early production was based on machines that came from England in sets subsequently assembled in Madras. A total of 163 Bullets were built by the end of that year.
In 1964 the iconic Continental GT café racer was launched to great acclaim when a team of photojournalists ride it from John ‘o Groats to Lands End in under 24 hours, by way of 7 laps at the Silverstone circuit. The GT featured a racing petrol tank, clip-on handlebars, rear sets, a humped race seat, rev counter and a swept-back exhaust.
Production of motorcycles ceased in 1970 and the original Redditch, Worcestershire-based company was dissolved in 1971.
Enfield of India continued producing the ‘Bullet’, as “Enfield Bullet”, due to dispute around the legitimacy of using the “Royal” nameplate. Finally, in the 1999 a lawsuit over the use of ‘Royal’, brought by trademark owner David Holder, was judged in favour of Enfield of India. The brand “Royal Enfield” was back in the market with the Bullet 350 and the new models designed and produced in India, including Cafe Racers, Cruisers, Retros and Adventure Tourers.
In 1977, Royal Enfield was back at home because of Indian companies export of the 350cc Bullet to the UK and Europe. Sales grew rapidly as the bikes developed, followed by classic British motorcycle enthusiasts.
In 1994, the Eicher Group acquired Enfield India Limited. The company was renamed Royal Enfield Motors Limited.
In 2013 Royal Enfield commenced to manufacture at its second facility at Oragadam, Tamil Nadu. With increased capacity, the state-of-art factory will be the nucleus of the company’s global ambitions in the future.
In 2014, Royal Enfield introduced the possibility of a new retail experience by opening the first-of-its-kind exclusive gear store at Khan Market, New Delhi.