- Hunter 350 attracts under-25 buyers without cannibalising Classic 350 sales
- Classic 350 remains top volume model despite competition from Honda and Jawa
- Premium 650cc twins boost profitability and aspirational appeal for Royal Enfield
Eicher Motors has been a hot topic in the market following a stellar quarter where the company was able to beat estimates and generate solid growth across verticals. The standout performer from its stable has been Royal Enfield, as it continues to enjoy a dominant market position in the mid to high range two-wheeler segment.
Leading brokerages like CLSA, Jefferies and Macquarie have noted that a combination of brand pull, targeted youth strategy, and simply making the best out of the premiumisation theme in India has revved up Royal Enfield's positioning as the undisputed leader among peers. Even as competition grows, the Siddhartha Lal-led company has never been stronger.
Royal Enfield's Variant-Wise Dominance
What has been particularly impressive about Royal Enfield is that the brand has dominated across all of its variants, sweeping away competition.
Royal Enfield's dominance starts with Hunter 350, which has become a youth magnet of sorts, with the share of under-25 buyers rising from 30-35% to 40%, according to the latest numbers compiled by Jefferies, which further notes that the Hunter series models are not cannibalising RE's flagship Classic model.
The Hunter series mainly competes with TVS Apache, Yamaha MT-15 and retro rivals like Jawa 42 and Honda CB350.
After Hunter comes the RE Classic 350, the bedrock of the brand's portfolio. Even with Hunter growing, Classic 350 remains the largest volume model, with no real change in market share despite competition from the likes of Honda CB350, Jawa Classic, and Yezdi Roadster.
Another model in the 350cc basket is the Bullet, which supports broad-based rural and semi-urban demand uptake. It also has no direct legacy rival except the Jawa to an extent that has a similar heritage positioning.
While Bullet enjoys legacy positioning, Meteor 350 is a strong performer in RE's 350cc cruiser niche. Bajaj Avenger is the closest competitor, but lags significantly in volumes and aspirational pull.
Moving on to the liquid-cooled and twin-cylinder engines of Royal Enfield, the Interceptor, Continental GT, and Himalayan 450 together form the core of the company's premium mix, contributing significantly to the margin due to higher realisations.
Macquarie adds that there that the export traction is improving in Latin America and South Asia, while developed markets are expected to pick up with revised tariffs.
While there is significant competition, including from the likes of Triumph Speed 400 & Scrambler 400, these rivals now sell only 1,000-6,000 units per month, whereas Royal Enfield averages 92,000 per month. Kawasaki, Honda, and Benelli models exist in the segment, but they don't challenge RE's scale or pricing headroom.
What Are Brokerages Saying About Royal Enfield?
Jefferies has been quite clear about its commentary on Royal Enfield, stating that its closest competitors - the Bajaj Triumph and Hero-Harley - are no longer a threat. Royal Enfield has firmly consolidated its position as the market leader in the premium bike segment for well over a decade.
CLSA, on the other hand, hails Royal Enfield as "one of the clearest beneficiaries" of India's shift towards premium bikes, noting that Hero-Harley and Triumph's volumes are meagre compared to RE's levels. Jefferies notes that even Google Trends shows RE has a clear dominance when it comes to retail interest compared to its peers.
The Hunter is pulling new riders, the Classic remains a fortress, and the 650cc twins keep RE aspirational and profitable, while rivals struggle to match RE's consistency.
As the premium bike race gathers pace, Royal Enfield isn't just keeping up with the pack anymore; the company is building its own moat, which is unlikely to be matched by any immediate rival anytime soon.
INFOGRAPHIC: What's 'SaaSpocalypse'? Why Indian IT Stocks Crashed After Anthropic's Mega Release
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
