Why Bike Makers Eye Royal Enfield Pie

ROYAL ENFIELD HAS BEEN luring motorbike enthusiasts with its muffled thud for almost three decades. Now, rival bike makers have also realised the importance of the premium lifestyle 350-400cc segment where Enfield has had an unchallenged run.

In a quick move, Hero MotoCorp entered into an alliance with Harley Davidson to launch the iconic U.S. motorcycle in early July, at a price fine-tuned for the Indian market. Close on its heels, Bajaj Auto unveiled British motorcycle manufacturer Triumph’s two 400cc models. Yamaha India plans to roll out its first set of 300cc bikes, R3 and MT03, this year. TVS is also working on 225cc-350cc bikes.

This underscores a trend gathering speed for some time — growing demand for premium bikes with 200-500cc engine displacement. "If Royal Enfield is where the money is, then we have no choice but to rob that bank,’’ Rajiv Bajaj, MD and CEO of Bajaj Auto, said while launching Triumph bikes. The factors supporting demand for premium bikes are increasing per capita incomes, growing biking culture and popularity of bigger models among youngsters.

Now, in order to push demand, bike makers are considering affordability, too. After all, two-wheeler segment is yet to reach pre-Covid levels. Sales grew 17% to 15.86 million units in FY23, but were still lower than 16 million in FY15 and a long way from all-time high of 21.2 million in FY19. Demand for lower cc models has been hit by 50% price increase in entry-level segment over past three years.

How Market Stacks Up

Royal Enfield is market leader in 350-400 cc category in which Bajaj manufactures sports bikes such as KTM and Husqvarna. Bajaj has always believed in the margin game while maintaining volumes ever since it launched Pulsar 150cc and 180cc over two decades back. The premium play started with KTM a decade back. Hero was mainly in the volume game. And this is what it is targeting with its latest launch, Harley Davidson X440. It is priced starting ₹2.29 lakh ex-showroom to attract aspirational buyers looking for an upgrade. Hero Motocorp chairman Pawan Munjal says the company will bring a wider range of premium bikes. The company will manufacture Harley Davidson at its Neemrana facility with locally made motors, engines and chassis.

Bajaj has launched Triumph Speed 400 and Scrambler 400X (both 400cc). The Speed 400 version has been priced at ₹2.33 lakh. Bajaj plans to roll out 5,000 motorcycles a month from its second plant at Chakan, Pune. Bajaj plans to open 120 showrooms of Triumph in 80 cities by March 2024. Both have been conceived and designed in Hinckley, the headquarters of the motorcycle maker in the U.K. Triumph will have 100% overlap with Harley and Royal Enfield, says Rajiv Bajaj.

In order to counter the moves, Royal Enfield plans to launch 13 new bikes in coming years — including new-generation Himalayan 450, Shotgun 650, Bullet 350, 450cc Roadster and Continental GT 650.

TVS Motor Company also expects the premium bike segment to grow on the back of rise in overseas shipments. The motorcycle maker has two premium products — flagship Apache RR 310 and neo-retro Ronin — in this displacement category but that’s likely to change with the new 225-350cc bikes that it’s working on. Yamaha India is planning to roll out its first set of 300cc bikes, R3 and MT03, this year. It seeks to offer upgrades to existing customers of 155cc or 250cc bikes. It will also launch 700cc bikes in coming years.