A key sits in the ignition switch of a Royal Enfield Motors Ltd. Classic 350 motorcycle. (Photographer: Dhiraj Singh/Bloomberg)

No New Models From Royal Enfield Till New Emission Norms In 2020

Royal Enfield will not introduce a new motorcycle model till the implementation of new emission norms in 2020 and will instead concentrate on its two upcoming launches.

The two-wheeler arm of Eicher Motors Ltd. recently unveiled a 650cc twin cylinder engine, and two new motorcycles – Interceptor and Continental GT – at a motor show in Milan, Italy, and plans to concentrate on those two till the Bharat Stage VI emission norms comes into play, Managing Director and Chief Executive Officer of its parent company Eicher Motors Ltd., Siddhartha Lal said on Tuesday.

Royal Enfield, which saw a 22 percent jump in sales in the second quarter to 2.02 lakh, will have new variants or refreshed versions of existing products during that period. “We will have variants from all platforms, like the Stealth Black (variant of the Classic 500 motorcycle), but no new platforms,” said Lal.

Indian automakers will have to leapfrog to the much stricter BS VI emission norms from BS IV in less than three years. The new norms will require the introduction of advanced technologies to ensure pollutants emitted by the vehicles are reduced and comply with the specified limits. It will also mean a number of changes to be made in the engine systems.

Royal Enfield plans to launch the two new motorcycles in U.K. and in the rest of Europe first before launching them in India by April next year. The manufacturer also sees interest for the twin cylinder engine-based motorcycles in Latin America and Southeast Asia, Lal said. Royal Enfield plans to spend the next two fiscal years concentrating on its first line of twin cylinder motorcycles, and on meeting its production schedules.

The company is confident of achieving the 8.25 lakh sales target for the current fiscal and expects to sell 4.40 lakh units in rest of the year. The leisure motorcycle manufacturer plans to reach a monthly production level of 75,000 units by March, but does not have any plans to set up another facility through the upcoming fiscal. Lal said the company could tweak the levels upwards in case of a few months of high demand, but was confident of meeting demand based on its existing capacity.

In terms of investments, the company was on track to spend its planned capital expenditure of Rs 800 crore for the year, he said.

Speaking about the prospect of electric motorcycles, Lal sounded rather less hopeful of any short-term implementation as he expects battery costs to come down only over a 5-7 year horizon. Royal Enfield, too, he said, was doing some basic research on such products, but wouldn't be the first to come out with a product. “We are working on that with a 5-10 year horizon,” he said.