Royal Enfield is in a desperate state and also India’s car market is in a recession as per reports. So Royal Enfield under pressure to reduce the amount of profit. Sales of bikes at the top of the 350-500 cc segment have been declining at a rapid rate, as well as sales of bikes from other companies. In April-June, the company’s profit margin dropped by about 21 percent. After about 3 years, the Royal Enfield Company saw such a disaster.
The company made a net profit of about Rs. 450 core from April to June this year. Last year, company made around Rs. 120 core in this three months. Enfield Company saw sales down about 27% in July this year compared to last year.
Royal Enfield has sold more than 50,000 bikes every month for the three years since May 2016. The company has sold a record amount of bikes for almost 3 years since then. But this time, the trend was broken on July 2019.
Siddhartha Lal, chief executive officer of Eicher Motors, said that the responsible for this was the downturn in the two-wheeler and petrol-powered cars market. He also blamed the country’s economic system. Various reputable car makers in the country are currently undergoing a financial meltdown. The amount of sales is constantly decreasing. Companies like Maruti also reported lower sales.
According to experts, people are turning to buying battery-powered cars instead of petrol-diesel-powered cars, and many consumers are refusing to buy them. He also attributed the increase in the price of the two-wheeler market, the increase in parts prices and the continuous rise in fuel prices.
According to bike experts, the classic design is why buyers are attracted to Royal Enfield. The nostalgia of the people involved with the bike. But, as most buyers complain, Royal Enfield is technically far behind other company bikes in this segment. Other companies such as this segment include fuel gauge meters, standard ABS, alloy wheels, LED headlights, tubeless tires, etc. But in the case of Enfield, the facilities are not shot. Buyers are also turning away from the bike due to the extra weight and excessive vibration of this bike. There are also allegations of overcharge of parts.
However, Royal Enfield is still at the top of the market for bikes in India, even though profits are low. The company is well ahead of other bike makers in this segment. Also optimistic is Eicher Motors, the maker of Royal Enfield. Coming soon to the market is a new version of the Royal Enfield Classic. The company believes that the market will rise again once the bike is in the market.