Indian Economy News

Royal Enfield enters Indonesian market

Chennai: Royal Enfield has entered the Indonesian market, targeting the mid-sized motorcycle segment and an exclusive store in Jakarta. The company has said the foray into Indonesia, the third largest two-wheeler market in the world, is part of the company’s growth strategy and it is focusing on the international market to expand its presence in the mid-sized motorcycle segment (250-750cc).

While the Indonesian market is dominated by Japanese brands, including Honda, Yamaha, Suzuki, the main competition for Royal Enfield would be Kawasaki, which has one vehicle in the mid-sized motorcycle segment, and other major brand is Harley-Davidson Motorcycle.

The company has said “for the moment, it is only for the domestic market.”

The company announced the foray at the GAIKINDO Indonesia International Auto Show 2015 and showcased the Bullet 500c, Classic 500c and Continental GT 535cc.

Along with the motorcycles, Royal Enfield’s gear collection that includes purpose-built, protective riding gear and its recently launched Despatch Rider apparel and accessories collection will also be available for sale in the market.

Abhijit Singh Brar, head — marketing,  commented Enfield would commence retail operations in the coming months from its exclusive dealership in Jakarta, being set up in partnership with PT Distributor Motor Indonesia, which has signed up as a dealer for the region.

In addition to the store, it will also build service and aftermarket capability for Royal Enfield in Jakarta.

Arun Gopal, head — international business, added the brand had pioneered growth in the mid-sized motorcycle category in India.

Backed by a growth of over 50 per cent year on year in the last five years, the company's ambition today is to lead and grow the middle weight segment, which is undeserved globally with respect to evocative products.

The company believe this growth will largely come from markets like India such as Latin America and South East Asia, given their size and comparable commuting trends. The company last year entered Colombia where it claims it got encouraging response for its products.

Indonesia is a strategic market for Royal Enfield. With its large commuter based, this market has enormous potential to upgrade to the next level of motorcycles, should there be optimal product choice.

"We will build our presence from Jakarta and depending on the response, we will expand our footprint to the other key cities in Indonesia," said Gopal.

In Southeast Asia, Indonesia is still dominating the motorcycle industry among the member countries of ASEAN Automotive Federation (AAF). Indonesia is ranked first followed by Thailand. RE would focus at the midsize segment (250cc - 750cc). Two wheeler users in Indonesia are upgrading from 150 cc to midsize segment motorcycles, and given the lack of attractive options in the mid-size segment, RE motorcycles can fill the gap

Indonesia has a huge potential of growth and RE wants to create and expand the mid-size motorcycle segment in the market.

Royal Enfield operates through 12 company-operated stores and 400 dealers in all major cities and towns in India, and exports to over 50 countries across the world including the USA, Japan, UK, several European and Latin American countries, as well as the Middle East and South Asia. The company is looking at South East Asian countries.

In 2014, Royal Enfield sold more than three lakh motorcycles globally. In 2015, the company aims to produce 4.50 lakh motorcycles to supports its growth strategy globally.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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