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    New geographies lift Royal Enfield retail sales to record

    Synopsis

    The wholesales domestic volume of Royal Enfield fell 3.6 per cent to 67,538 units in October.

    royal-bccl
    The company is gradually rolling small format stores which are nearly a fifth in size compared with full size store of 1,500 square feet.
    Mumbai: Royal Enfield, the maker of the iconic Bullet motorcycle, has registered record retail sales in October as “accessibility" initiatives undertaken by new CEO Vinod Dasari helped the company reach hitherto untapped geographies.

    According to people in the know, Royal Enfield delivered close to 95,000 motorcycles in the month of October, 50 per cent more than the recent monthly production rate of about 60,000 units.

    The wholesales domestic volume of Royal Enfield fell 3.6 per cent to 67,538 units in October, the lowest pace of decline in the last 11 months. Domestic volumes fell 16 per cent in the first seven months of the current fiscal year owing to some discernible sign of brand fatigue, slowing market and intensifying competition.

    Vinod Dasari, CEO, Royal Enfield, told ET that as the slowdown began, Royal Enfield persistently worked on bringing in innovation to product and processes. The company introduced new variants to the timeless Bullet and the popular Classic 350, and also spread the network across India by adding 250 new ‘studio stores’.

    “During October 2019, with festive demand kicking in, our efforts at building wider accessibility for products and services helped register improved sales volumes. Moreover, we have reached out to more intenders through various media platforms and in-store activities,” added Dasari.

    The company witnessed demand across smaller towns and cities, which are showing a “tremendous potential” for growth, said Dasari. These may soon become a huge market for the middle-weight motorcycles.

    A sales rebound in the festive season by leading brands such as Royal Enfield, Maruti Suzuki and Hyundai points to pent-up demand, although discretionary purchases will still take some time to stabilize.

    “We continue to monitor industry trends and consumer sentiment closely and expect that demand will see gradual and consistent improvement over the coming months," added Dasari.

    Recovery in the retail volumes, and the bottoming out of wholesale volumes have been well received by Dalal Street. The stock of Eicher Motors, which owns Royal Enfield, rose 28 per cent in the past three months, nearly three times the benchmark Sensex. It is trading at 26.6 times its projected 12-month earnings, one of the most expensive auto stocks.

    Retail sales in the festive period rose 5 per cent for Royal Enfield as benefits from small-format stores began accruing, and the company was able to strike better financing deals with banks.

    The company is gradually rolling small format stores which are nearly a fifth in size compared with full size store of 1,500 square feet.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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