Royal Enfield is suffering from a dip in sales, after years of growth.
The trend started earlier this year, with financial reports this spring indicating months of stagnancy. The bad news has continued through the following weeks, with the company’s profit dropping 21.6 per cent in the April-June financial quarter, when compared to 2018’s numbers for the same period. Royal Enfield saw revenue down 7 per cent in that quarter. Earnings dropped 24 per cent. And, sales for July were under 50,000 units, the lowest they’d been since May of 2016, dropping to 48,000 motorcycles. In July of 2018, Royal Enfield sold 67,000 motorcycles.
What’s to blame? There are several factors. Royal Enfield wants to be the world’s largest manufacturer of mid-displacement motorcycles, but it still depends on the home market in India for much of its sales. That’s good, when you think it has a captive audience of about a billion people. Unfortunately, the country’s auto sector is in a slump right now, and that’s hurting Royal Enfield.
Then, there’s the fact that Royal Enfield has made decent inroads in other markets, but still doesn’t have a strong presence overseas like it should. This partly comes down to the manufacturer’s dubious reliability record over the past few decades, and partly because until fairly recently, its lineup was extremely limited.
Even now, Royal Enfield really only offers a slim selection of bikes, and that doesn’t help either. Although its new designed-in-England machines are gorgeous, not everyone wants a retro bike.
How will Royal Enfield fight back? Part of the plan is to introduce more models (like that 250 that’s supposed to be coming). And, Royal Enfield is also working on improving its in-country sales by focusing on new retail stores. Given that India is still its strongest market, that’s probably a good place to start.