Royal Enfield has been the most shielded manufacturer in India. In the last many years, it has been growing at a hefty pace and there is no competition bothering it whatsoever. Back in 2010 the brand used to sell around 50,000 units a year. Fast forward to March 2016, the company sold 51,320 units globally in one single month! Yes, that’s the level of growth they have registered. However, competitor Bajaj has stood up to take notice…
In a recent conversation with Business Standard, Rajiv Bajaj, Managing Director, Bajaj agreed and confirmed that eventually they will have to enter the segment. He believes that all segments end up becoming a two player game with time. Here’s what he had to say on the question – will Bajaj enter this segment?
“Definitely. Every mature segment becomes a two-horse race eventually in any given market. The entire market is monopolised today by one person…. there is room for a second person. We can create a brand for that space. I am sure everyone else is thinking about it. The success of Royal Enfield is not lost out on anyone.”
He however understands that targeting an established brand like Royal Enfield will not be easy and he is not confident of pitching their Avenger brand against it (Speculative report suggests bigger Avenger 400 is under works). He feels a prospect buyer of this segment may not feel good buying a similar-sized Avenger which also has a small 150 cc sibling roaming around in the streets.
To rival a niche brand they will have to offer something different with a lot of value adds. This is where a new brand can be pitched in which can be dedicated to challenge Royal Enfield’s supremacy. While they are deciding on how to do it, Royal Enfield is expanding like crazy – they have a new plant coming up in 2018 taking the total production capacity to 9 lakh units a year!