Royal Enfield enters the modern world

(www.svcetselesta.com)

(www.svcetselesta.com)

By Evan Reid, Student No#: 215308274, WordPress username: evanreid1

In India Royal Enfield enjoys a cult like following, being seen as a masculine status symbol. Here in Australia for a long time Royal Enfield was targeted purely at the classic motorcycle enthusiast, offering an almost exact replica of a classic English motorcycle for half the price of the original.

 

Traditionally Royal Enfield does not spend much on advertising in Australia, they don’t need to. Instead milking the brand and its history to sell a niche bike to a niche market. They have made virtually the same motorbike models for over 50 years, with only some minor technology updates. That is now changing for Royal Enfield, in 2013 they started production of the retro café racer the “Continental GT”. This year Royal Enfield has taken an even bigger gamble, launching their first ever adventure bike the “Himalayan”.

The less risky of the two for Royal Enfield is the Continental GT. What started out as a concept bike in 2010 the continental GT is a natural evolution for Royal Enfield and a smart segment of the market to target. Café racers are a traditionally retro and British bike, and Royal Enfield is a company with British roots. Founded in England in 1893, it was in 1955 assembly of the Bullet model moved to India, and full production in India started in 1967. During the marketing campaign for the Continental GT, Royal Enfield extensively targeted the British market, holding the official worldwide product launch  in the Café racer motorcycling mecca ‘Ace Café’ in London in 2013. The advertisements showcase the co-design by British companies, and the testing process in England. The Continental GT is targeting medium price medium quality, retailing at between $8500 and $9500 compared to the triumph Thruxton at around $16000. The cheapest competitor is the Braap Mercury at $3799, however being a 250cc really puts it out of the market for a lot of consumers.

(www.royalenfield.com)

(www.royalenfield.com)

The latest and most risky move is the “Himalayan”. At the moment this is only set for distribution in India, however there is  media talk and interest from Australia and other countries.  The Himalayan is a modern adventure bike, something completely different from Royal Enfield’s target market. This segment of the market is dominated by the big Japanese and European bike makers, both renowned for exceptional reliability and quality, with most bikes in this segment being larger and far more expensive. Prices for the Himalayan have not yet been announced, however it seems Royal Enfield are targeting again the cheaper medium quality market, with limited accessory options and a smaller simpler engine than the competition. As opposed to focusing on heritage, the campaign for the Himalayan has focused on the reliability of the new engine, the flexibility of riding destinations with the new bike, and emphasizing the on road performance. The styling is modern, simple and rugged, with simple color schemes lacking the retro paint and chrome of the other offerings.

Royal Enfield’s product offerings can be broken into 3 segments

  • 350cc and below replica classic motorcycles
  • 500cc Cafe racer “Continental GT”, released in 2013
  • 411cc Adventure bike “The Himalayan” Not yet released

 

Sales of the Continental GT (350cc and above sector) are increasing however they still make up a small portion of overall sales with exports making up an even smaller portion.

 

With the Himalayan, Royal Enfield are positioning themselves in a totally different, far more competitive segment of the market, the only way for the Himalayan to survive is to ensure the it is reliable and cheap, their heritage and pedigree will be of no assistance to them. If successful this will be a massive step forward for the company and potentially build the brand to expand even further. Just recently there has been talk of a Royal Enfield cruiser, which could be the next step.

 

References:

http://auto.economictimes.indiatimes.com/news/two-wheelers/motorcycles/royal-enfield-total-sales-jump-65-in-january/50803012

http://www.amcn.com.au/news/1602/royal-enfield-himalayan-revealed/

http://www.royalenfield.com/

http://www.bikesales.com/

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