Published On:November 22 2019
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Royal Enfield will return to double digit growth: CEO.

Record retail sales in October have given Royal Enfield’s new CEO Vinod Dasari the confidence to ‘call’ the trough in the current cycle, and he expects sales volumes of the popular Bullet bikes to accelerate from here – possibly in double digits.

“I think we have hit the bottom. Given the range of products that will come, it (a double-digit growth rate) is possible. The general economic sentiment has also got to improve,” Dasari said. “High-end vehicles get hit much worse during downturns. But the minute the sentiment improves, the fastest growing segment will also be this.”

The October turnaround came after sales declined in double digits this year. Dasari said the brand would get back to double-digit growth led by sustained product action and increasing reach, both locally and internationally.

“I love downturns. Quoting Sun Tzu, the Chinese philosopher , ‘In the midst of chaos, there is also opportunity,’” he told ET.

Dasari took over the reins at a time when Royal Enfield was slowing in the marketplace.

“Just because there was a downturn, we did not cut down on our capex. I don't think we’ll spend any more on any large (facility). Most of our capex will go into capability building, new products, electric and other stuff. And it will also go into many small assembly plants around the world,” added Dasari.

The company has come out with a new vision called Royal Enfield 2.0, which consists of four broad action points - expanding product range, geographical reach, solution selling and leveraging digital platform to build a ‘global consumer brand from India’.

Dasari attributed the drop in sales at Royal Enfield to lack of new products and the downturn. The company launched new entry-level variants such as Bullet X and Classic Signals, and opened small studio stores that helped enhance consumer access.

About 500 small Studio stores have been set up in the last six months and the studio stores already account for 10% of the company's monthly sales. Interestingly, 90% of its stores have already broken even in three months with each store averaging about 12 to 15 bikes a month.

RE volume grew 22% annually in the last five fiscals to 8.26 lakh units.


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