The battle for supremacy: Rising competition in the premium motorcycle market

The name Royal Enfield ( Eicher Motors ) has long been synonymous with the premium motorcycle segment in India. With a market share of over 90 per cent, the brand has been the undisputed king of the over 250cc sector for over a decade. However, its leadership is under threat as two established players aim to make a dent in the market.

Why are brands targeting this segment?

It's interesting to note that while the overall motorcycle market has stagnated from FY2014 to FY2023, the story is quite different for motorcycles over 250cc. Their share in the total motorcycle sales volume has leapt from about 2.5 per cent in FY14 to 7.8 per cent in FY23. Thus, an increasing number of players are now looking towards the premium motorbike sector.

Royal Enfield's remarkable journey

Royal Enfield has been a leading player in the over 250cc segment. From around 1.8 lakh units in FY14, they've ramped up their sales volume to 8.4 lakh units in FY23. This has increased their slice in the overall motorcycle market from 2 per cent in FY14 to 7.6 per cent in FY23. Moreover, they've maintained robust EBIT margins, averaging 20 per cent over five years, outshining their peers in the sub-250cc categories.

On the other hand, players such as Harley-Davidson and Triumph Motorcycles could not capture the market, facing challenges such as erratic sales and minimal growth.

Will the new entrants survive?

Although Triumph and Harley-Davidson have faced bumpy rides, the entry of two-wheeler giants Bajaj Auto and Hero MotoCorp might revive their fortunes.

Bajaj Auto and Triumph Motorcycles
In October 2020, Bajaj Auto entered into a partnership with Triumph Motorcycles to jointly manufacture 250-750cc motorcycles. In July 2023, they launched Speed 400X and received over 2,500 bookings within just a few hours of the announcement.It had an order book of 17,000 units as of Q1FY24 and had initiated deliveries in August with 8,000 units already delivered.

The duo aims to sell 40,000-50,000 units of mid-size motorbikes globally in FY24. Further, Bajaj Auto wants to expand its reach by increasing the number of Triumph dealerships from 15 to 120 in the next two years.

Harley-Davidson and Hero MotoCorp
In October 2020, Harley-Davidson and Hero MotoCorp partnered to create and sell Harley-Davidson-branded motorbikes in India. After launching the X440 bike in July 2023, the partnership received advance bookings of up to 25,000 units, which was almost twice the sales generated by Harley-Davidson from FY17 to FY23.

What lies ahead

There are two reasons why Royal Enfield continues to enjoy a significant share of the premium motorcycle segment: strong branding and a wide distribution network. Moreover, its consistent branding efforts make Enfield a formidable opponent.

But the road for other players wasn't smooth. Take, for instance, Mahindra & Mahindra 's attempt to enter this space with the relaunch of Jawa and Yezdi in FY19. Although there was an initial buzz, they struggled with quality issues and a limited dealer network, leading to modest sales of only 40,000 units in FY23.

Despite the rise in sales, can Bajaj Auto-Triumph Motorcycles and Harley-Davidson-Hero MotoCorp challenge Royal Enfield's dominance? Only time will tell.