Royal Enfield Says It Has No Plans To Hold Back Long-Term Investments
Robotic arms spray lacquer onto gas tanks for Royal Enfield Classic 350 motorcycle as they move on a conveyor on the production line at the company’s manufacturing facility in Chennai, India. (Photographer: Dhiraj Singh/Bloomberg)

Royal Enfield Says It Has No Plans To Hold Back Long-Term Investments

Royal Enfield, the maker of the popular Bullet and Classic motorcycles, has no plans to pause investments, aided by a healthy cash position and revival in sales as India eases lockdown curbs.

The company has a strong balance sheet and cash position and will continue with the investments, according to Siddhartha Lal, managing director at Eicher Motors Ltd. “We are not holding back on any long-term investments,” he said in a conference call. “We remain quite optimistic (about the future).”

According to Vinod K Dasari, chief executive officer at Royal Enfield, the company’s bookings are already at pre-pandemic levels.

The maker of middleweight premium motorcycles has already restarted 80-90% of dealerships and the business is coming back to normal, Dasari said. “Lots of online queries are coming,” he said, adding the company will focus on enhancing the overall purchase and ownership experience via newer, more seamless digital platforms.

Sales of Eicher Motors—the maker of Royal Enfield motorcycles—fell by a fifth over the year-ago period during the fourth quarter. In March alone, its sales volumes fell 41%. That caused the company’s net profit to fall by nearly half during the period.

Also Read: The One Thing That’s Going In Favour Of Royal Enfield

Dasari, however, said an expansion to rural areas via studio stores—a small-store format—cushioned the pressure on sales. “Our strategy of going beyond the cities has actually worked.” He expects demand to increase as people may move away from public transport after the Covid-19.

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