Royal Enfield Sitting on 40,000 Bookings; Supply Chain Disrupted

On a product priced at Rs 1.50 Lakh, 30 percent margin means Rs 45,000 whereas 20 percent corresponds to Rs 30,000

Royal Enfield bookings and inquiries have swollen to new highs after the pandemic led downfall. While these are good signs but there is a problem…

This is one news that is both positive and negative! The auto industry has been battling with slowdown for the last many quarters now. Things got further aggravated by the COVID-19 pandemic that stuck us around February-March 2020. There was a national lockdown for more than a month to prevent the spread of the disease. While India has become the country with one of the largest COVID-19 positive cases in the world, the national lockdown has disrupted businesses.

The good news is that we are inching towards normalcy. Auto makers have been showing consistent growth in numbers from the March-April 2020 lows. In fact, according to an online report, Royal Enfield, a maker known for its classic motorcycles, is sitting on a very strong order book of over 40,000 units.

That is not all – Vinod Dasari, the new CEO of the Chennai based company says that online inquiries have increased by as much as 4-5 times from pre-COVID levels.

Royal ENFIELD BOOKINGS
The company has also started a new facility – Service on Wheels.

But the bad bit is that the supply chain is disrupted. After the major April-lockdown jolt, frequent state or district level lockdowns have impacted production. Vinod says this is frustrating but there is very little the company can do about it. He adds that even if one of the important areas from Pune, Aurangabad, Gurugram or Chennai goes into lockdown, the complete supply chain gets disturbed and impacts everyone.

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Royal Enfield is also working on electric motorcycles and in fact it has already got a few prototypes ready (more details). In fact, in this upcoming tougher era, the company has prepared an all new 350 platform which will spawn many motorcycles in the future. The first bike to be based on this platform is the Meteor 350 which is ready for launch (see spy pics).

Source – Bloomberg Quint

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