Eicher Motors Expects Two-Wheeler Sales To Rise Amid Covid-19 Situation
Eicher Motors Ltd. expects increased demand for two-wheelers as people would be wary of using public transport amid the coronavirus pandemic, according to its annual report.
The company has presence in the two-wheeler segment through Royal Enfield, which sells niche bikes across domestic and international markets.
Royal Enfield was witnessing a strong initial customer interest with the gradual easing of the coronavirus-led lockdown, said Siddhartha Lal, managing director at Eicher Motors.
"We estimate an increased demand for personal transportation and two-wheelers as people would be wary of using public transport. This we believe will augur well for us and for the industry as a whole," Lal said in the 2019-20 annual report.
Royal Enfield, he said, continues to make concrete inroads to expand its retail network, while further strengthening its supply chain and vendor ecosystem.
"With an aim to further build accessibility through a host of seamless digital solutions and a variety of financial solutions, we are confident of capitalising on this demand as the situation stabilises," he said.
On Royal Enfield's international operations, Lal said it was well poised to expand and lead the middle-weight motorcycling segment globally.
"Our international markets are beginning to show significant and sustainable growth trends on the back of motorcycles we have recently introduced — the Himalayan and the 650 Twin motorcycles — and we believe we have strong potential for further growing these markets for Royal Enfield," he said.
The company has recorded an overall volume growth of 96% across international markets, Lal said.
"Both developing markets and matured markets have performed exceedingly well, with Europe registering a 100% growth over last year," he said.
The company's overall volumes declined 15% year-on-year to 6,97,582 units in 2019-20. Its total revenue from operations dropped 7% to Rs 9,154 crore in the last fiscal. The company's revenue from domestic business fell 12% to Rs 8,323 crore in the last financial year.
The revenue from international business, however, more than doubled to Rs 831 crore in 2019-20 from Rs 379 crore in 2018-19 on the back of a strong response to the 650 Twins, resulting in almost doubling the export volume.
About the VE Commercial Vehicles business, Lal said, "While we expect the current year to continue to be challenging, we remain focused on our long-term initiatives and are optimistic that the industry will be back on track soon, largely led by investments in infrastructure."
VE Commercial Vehicles, a Volvo Group and Eicher Motors joint venture, is also bringing sharp focus on cost management and improving productivity, he said.
"We will continue to focus on driving modernisation in the commercial vehicle industry and we hope to better the market as the economy improves and the industry comes back on track," Lal said.