Siddhartha Lal said that so far the company has opened around 25 exclusive stores overseas
Siddhartha Lal, managing director and CEO, Eicher Motors Ltd said that so far the company has opened around 25 exclusive stores overseas and plans are to add another 20-25 stores during this year.
During the investors call Lal said, outside of North America, Europe and Australia are more mature markets, which will be on a hopefully good trajectory but not for an exclusive growth one.
In Colombia the company has 5-6 stores, but in the rest of the countries it only has one store each right now.
"Right now, we are just learning and expanding in these four core markets for us. Any of these or all of these could become very large markets for us over the next decade. So really it is these four core markets that we are expanding on," he said.
The company is adding single stores in couple of other markets also, which hopefully by a year or two they will mature so that it can then take action in that country and expand. Enfield is putting in enough pipeline so that once some of these four markets are growing properly, the company will have something of other markets which can also grow.
In few countries, where the company sees some traction, is through very limited number of dealerships in developing markets. So while it was focusing on that, Enfield's units are still much higher from developed countries right now.
"We just expect that over the next five years the developing markets will be on a different order of magnitude, therefore our retention is much higher there," said Lal.
"Our North America market which was our first owned subsidiary in North America, taken us a little bit of time because we have just been adding dealers and getting up to speed in US market," said Lal, who added that this year US is also expected to be a very good market. The European market is doing well in its business currently.
In the big five — UK, Germany, France, Italy and Spain — each has about 50 dealers, most of them are multi-brand, and some exclusive dealers, but Enfield has approximately 40 to 60 dealers in each of these countries.
While the company is selling well in some of these markets, the size of the market is low. The market is normally slightly higher powered motorcycles which the company do not have in its portfolio as yet.
"So all of that means we are still a niche player here rather than a mainstream player which we plan to be in developing markets," said Lal.
The oldest motorcycle brand Royal Enfield in continuous production with focus 350-500cc. With a compounded annual growth rate (CAGR) of more than 50 per cent in last six years, Royal Enfield has grown phenomenally, becoming one of the most profitable automobile brands in the world.
Royal Enfield sold more than 660,000 units globally in 2016-17, and intends to ramp-up its production capacity to up-to 9,00,000 motorcycles by end of 2018, to meet its increasingly rising global demands.