Hi
Came across this news
I have kept data for them for close to 5 years and they have declining sales throughout. Unfortunately I dont have data for their entire sales period in India. This could help the Interceptors. I will also want to know how well the Husqvarna Vitpilen and Svartpilen 250 are doing though they are of a lower weight class.
A very small benefit for RE. Perhaps insignificant imho.
Rgds
Disc: continue to be invested and have had txns in last 30 days
HARLEY DAVIDSON operates in very premium segment.I dont think at any point RE’s market coincided with them.I will be more concerned with Bajaj Triumph partnership and ktm eating into the premium motorcycle pie.
Hi
This is an incorrect assumption. Please have a look at the product pricing matrix which I have shared above. Beyond the commuter category a biker is looking to jump classes - from quarter litre class to half a litre for instance. For RE350cc bikes the next upgrade is a 500/600cc bike which both Interceptor as well as HD/Kawasaki etc offer.
The analysis on KTM side if you look at the numbers it is Duke 200 which is their bread and butter and not 390 RC/non RC. Which again is commuter jumping class.
Today the difference between the most sold HD in India and RE 650cc GT is ~2L and that is not a big price point to go for the HD brand if someone can. So buyers are actually moving from lower class to 650 or decide to stay onto 650 rather than look for a 10L+ bike now given the limited options around 5L price mark.
Bajaj has already started cannibalizing its own sales of KTM via Husqvarna Vitpilen and Svartpilen 250 and taking over the entire quarter litre category. These are excellent bikes is what I hear.
Having said all of this HD’s peak sales is ~500 a month… Going to RE or Bajaj doesnt make a big difference imho.
Rgds
It looks like a full exit for HD from India
Hi
Below is the chart for monthly domestic sales of RE bikes for last 80 months.
Also mapping the monthly closing price. The correlation between price and sales number is 0.85 
Now shift the price a month forward to check correlation example month of August 2020 sales with September 2020 price. Then the correlation is close to 0.9
Rgds
The story turned very quickly. Few weeks ago we thought they were moving out of Indian Market but now it seems they might end up partnering.
They have already started developing 300cc bikes in a partnership with Benelli’s Chinese parent.
I guess a tough competitor is coming in? what do you guys think?
Hi
Some ‘news’ updates on REs.
For the first time RE sets up a factory outside India. The variants which are popular overseas will be sold -Himalayan and the 650cc twins.
Happy that the brand is making further strong footholds for a hopefully very long story in the middleweight motorcycle category.
In other news the new 350cc engines and bikes were ‘leaked’ a few days ago. They look modern and the engine will be efficient though I was expecting a little more bump in bhp
And some classic retro memorabilia. British bikes bring in a sense of nostalgia for those who like fun on 2 wheels. Had seen 3 iconic British brands while growing up BSA, Norton and RE (the 1st 2 in my grandparents’ place & the 2003-04 RE which my sibling rode). Between the two of us we have tested every RE bike ever made since 2003.
Rgds
Disc: Invested
Harleys are exiting India & Honda is entering with 500C Cruiser
Hi
The Honda bike if its the 471cc parallel twin then will be the Honda Rebel 500. The engine in my honest opinion is far superior to any RE engine. This Honda engine is the one on CBR500 which is one of the best in its class.
Let us see how the pricing is. I suspect this could be on the higher side because they would lack the localisation aspect. I am just guessing I do not know.
But a Honda is super reliable and smooth compared to an RE.
https://powersports.honda.com/street/cruiser/rebel-500
Rgds
Honda has quite a good name and I believe their distribution system is already one of the best as they are already in two wheelers and cars.
Entry of Honda has really made rethink my thesis on RE. But I would still wait for them to enter and see whether they are actually able to take away the market.
Disclosure: Invested.
Honda has launched Honda HighNess CB350 ., very competitively prices at 1.9L ex sh.
which is in the same range of RE 350 stable . This has all the makings to eat in to RE 350’s market share.
The first impressions are good. However, the reason Royal Enfield continues to do so well is because it has formed a kind of experience and buyers are drawn to that experience and the sense of belonging to a particular tribe. Does that mean that they are immune? Absolutely not but it is not as easy as it looks.
On the other hand the news of Harley leaving could not have come at a better time for Royal Enfield and although the clientele is very different; gives them an opportunity to expand in the middle weight segment.
Hi
The Honda bike’s expectation was in the league of 650cc. But anyways. Its a single cylinder, 5 gear 350cc engine 20Nm. Interested to see how much traction it gets.
Aside the numbers posted for September look respectable. Beats street estimates too.
Sales over the years below. But in Sept the company clocked 60041 units over 59500 last year (expectation was a 2% drop in Sept).
Rgds
I think Royal Enfield is a great Indian story in so many respects, products, finding their niche and now expanding rapidly in other countries as well. Compared with the pathetic quality of cars that most of our leading manufacturers make (excluding Tata which has recently been making some pretty decent cars) , they are actually doing pretty well.
However, make no mistake that the bigger players will notice the trend and start creating bikes for the middle-weight segment. It will be interesting how Enfield rises up to those challenges. Also, I hope they are focusing some part of their R&D on making electric bikes as sooner rather than later that is going to be the future of bikes or for that matter any vehicle.
Hi
I don’t think RE has any plans of making an electric bike for commercial purposes. Though I think they have one in concept phase that’s all. There was a long article in Bloomberg Businessweek a few days ago in which Sid Lal/Management explicitly said they don’t have concrete plans.
Royal Enfield says it has no concrete plans for its own battery-powered ride.
PFA link of the article. Nice to see the focus in the overseas market. I am hoping they can be significant players on the global scale in the middle weight segment.
If you cant view use this attached pdf (sorry formatting is all haywire)
India’s Royal Enfield Motorcycle Is Coming After Harley-Davidson (HOG) - Bloomberg.pdf (5.2 MB)
Rgds
Deepak
Disc: Invested and transactions in last 30 days.
Thanks for sharing the article.
Here is an article where Mr. Vinod says that they take Electric segment very seriously.
“Electric is something we have been thinking about for quite some time. We are trying to figure out exactly which segment is the right segment for us. Electric is something we take very seriously.”
On the other hand he told Bloomberg that they have no plans.
Future seems electric but not sure how far it is.
Disclosure: Invested
