ROYAL ENFIELD

MARKET OVERVIEW - AUTOMOBILE

• INDIA – 4TH LARGEST AUTO MAKER
• GROWTH EXPEXTED BY 2026 – 16-18 TRILLION USD
• DOMESTIC DEMAND OF 2 WHEELER – 81%
• TWO WHEELER EXPECTED GROWTH – 8-9%

SOURCE – SOCIETY OF INDIAN AUTOMOBILE MANUFACTURER

MARKET OVERVIEW
• 24.97 MILLION UNITS SOLD IN 2017-18

• 4.04 MILLION UNITS EXPORTED IN 2017-18

• 2.82 MILLION TWO WHEELERS EXPORTED

SOURCE – SOCIETY OF INDIAN AUTOMOBILE MANUFACTURER

• OVERALL DOMESTIC AUTOMOBILE SALES INCREASE YOY 2013-2017 -
7.01%
• EXPECTED SALES IN 2018-19 – 26.72 MILLION UNITS

NUMBERS MANUFACTURED
2018 2019

29.07

2019 VALUE TILL AUGST 2018

13.7 YOY GROWTH – 14.54% APRIL-AUG 2018

UNITS SOLD IN MILLION SOURCE – SOCIETY OF INDIAN AUTOMOBILE MANUFACTURER

MARKET SHARE – 2017-18

MARKET SHARE 2017-18

90
UNITS SOLD IN MILLION
80
81 TWO WHEELER SOLD IN
70 INDA 20.2257
60
PASSENGER CARS 3.2461
50

40
THREE WHEELER 0.7491

30
COMMERCIAL VEHICLES 0.7491
20

10 13
3 3
0
TWO WHEELER THREE WHEELER COMMERCIAL VEHICLE PASSENGER VEHICLE
SOURCE – SOCIETY OF INDIAN AUTOMOBILE MANUFACTURER
TWO WHEELER MARKET 2017-18
• EXPECTED GROWTH IN TWO WHEELER SEGMENT IN 2018-19 – 8-9%
• EXPECTED UNITS TO BE SOLD – 22.05 MILLION UNITS

SOURCE – SOCIETY OF INDIAN AUTOMOBILE MANUFACTURER

MARKET CONDITION
• GROWTH DUE TO INCREASING INCOME, MIDDLE CLASS AND YOUNG
POPULATION
• AVAILABILITY OF CREDIT AND FINANCING OPTIONS
• COST ADVANTAGE IN INDIA
• INCREASE IN FDI FLOW – 19.29 BILLION USD BY JUNE 2018
• FOCUS SHIFTING TOWARD ELECTRIC VEHICLE
ENVIRONMENT
• CHANGING EMISSION NORMS
• INCREASE IN POLLUTION
• USD – RUPEE FLUCTUATIONS
• CHANGING EMPHASIS ON ELECTIC VEHICLE
• FUEL PRICE
• INTERNATIONAL POLITICAL DISRUPTION
ROYAL ENFIELD
• ABOUT THE COMPANY
• Little bit of history
• Net worth of Eicher motors
EICHER AND ROYAL ENFIELD
• EICHER REVENUE - ……
• ROYAL ENFIELD REVENUE CONTRIBUTION IN IT - …..
PORTER’S FIVE FORCE MODEL ANALYSIS
• POTENTIAL ENTRANTS • Suppliers • Industry Competitors
Strengths: Strengths: Strengths:
• · Stable returns • Cater to strong buyers • High market growth
• · Access to distribution channels rate
• Supplied product is
• · Industry growth rate • Existing strong or
• · High product differentiation
• important input aggressive competitors
• Strategic stakes are high
Weakness: Weakness: Weakness:
• · High buyers’ switching costs • Many competitive • High level of product
suppliers differentiation
• · Incumbents’ defense of market
• No credible threat of • High switching costs for
• share the buyers
• · High capital requirements
downstream
integration • Brand identification
CONTINUED…
• Substitutes • Buyers
Strengths:
Strengths:
• Large number of buyers
• Technological • Buyers’ incentives
advancement • Sources of information
• Many substitutes like • Strong brand identity
scooters & A segment • Many substitutes
cars • Proportion of income spent on the
purchase

Weakness: • Weakness:
• Price differences • High Switching costs
• Fragmented buyers
• High product importance
 SALES COMPARISON ROYAL ENFIELD
FY 2018-19
CLASSIC 350 TOTAL DOMESTIC SALES
80000

70000

60000

50000

40000

30000

20000

10000

0
APRIL MAY JUNE JULY AUGUST SEPTEMBER
SALES COMPARISON IN UNITS SOLD IN 2018

SALES COMPARISON - 2018

CLASSIC 350 DOMINAR 400 APACHE
60000

50000

40000

30000

20000

10000

0
APRIL MAY JUNE JULY AUGUST SEPTEMBER
WHO IS THE CUSTOMER OF CLASSIC 350?
• ICON – NEED FOR POWER, RESPECT AND STATUS

• SENSE OF CONTROL AND FREEDOM

• BEHAVIOUR – VALUE EXPRESSIVE AND EGO DEFENSIVE

• ADVENTURE AND LEISURE LOVING

• 20 – 45 YEARS INDIVIDUAL FROM METROPOLITAN, URBAN AND RURAL

AREAS
Customers who buy brand other than Royal
Enfield
• ICON-People who want refinement,quick acceleration,light bikes
• People who do not care about vintage looks
• Behaviour-Value for money
• High maintenance cost,low mileage
CUSTOMER DECISION MAKING OF CLASSIC
350 Problem Recognition-Malfunctioning ,Financial
Circumstances, Marketing Activities,New Launch

Information Search-Technical Details

Evaluation Of Alternatives-Brands,Needs

Purchase Decision-Test Ride,Product Rating

Post-Purchase-Performance,After Sales Support

Sales Forecast Of Royal Enfield for the year
2019
CUSTOMER LIFE TIME VALUE OF CLASSIC 350
AVERAGE OF
A AVERAGE SALES 451475 LAST 5 YEARS
SOLD
CONSIDERING 1
SALES TO 1
B NO OF SALES PER YEAR PER CUSTOMER 1
CUSTOMER PER
YEAR
NO OF YEARS CUSTOMER BUYS FROM THE
C 25
COMPANY
D NO OF REFERALS FROM THE CUSTOMER 200
CONSIDERING
2% OF THE
PERCENTAGE OF REFERALS WHO BECOME PEOPLE BUY
E 2
CUSTOMERS OUT OF 300
INFLUENCED
PEOPLE
F GROSS SALES PER YEAR PER CUSTOMER (A*B) 451475
G GROSS SALES OVER LIFE OF CUSTOMER (F*C) 11286876
H GROSS SALES FROM REFERALS (D*E*G) 45147505
I TOTAL VALUE OF SATISFIED CUSTOMER (G+H) 90,295,010
CATEGORY
Company Entry level Executive level Premium level
Bajaj auto CT 100 Discover
Caliber 115 Pulsar 150
Pulsar 200NS
avenger 220 Dominar CATEGORY SIZE –
KTM Duke 200 Duke 390 563104
RC 200 RC 390
Royal Enfield Bullet 500
Bullet 350 CATEGORY VALUE –
Electra
Machismo
Rs. 7638 CRORE
Thunderbird 350
Thunderbird 500
Classic 350
Classic 500
Himalayan
continental GT

TVS sports Apache RR310

victor

Yamaha saluto FZ YZF R3

SZR fazer
R15

Hero HF Delux Karizma ZMR

HF Dawn Xtreme sports
LEVEL OF COMPETITION
Product Form
Royal Enfield Classic 350, Bajaj
Dominar, TVS Apache RR 310

Product Category
Thunderbird 350, KTM, Bajaj Avenger,
Yamaha R15, Harley Davidson, Suzuki

Generic Competition
Cars, Scooters, Scooty,

Budget Competition
Holiday packages, Tours
and Travels
FEATURES CONTRIBUTION TO PURCHASE SR.NO. FEATURES
DECISION BEFORE BUYING 1 LOOKS
2 MILEAGE
10 1 3 COMFORT
11% 11% 2
9 4 AFTER SALES
11% 8% 5 PRICE

3 6 RESALE VALUE
8 11% 7 FINANCE
10%
8 TRANSMISSION
7 4
9 ENGINE
8% 6 11%
5 10 BRAND
9% 10%
 RANKING AND POSITION
• Brand
Manufacturer Price Max Engine Mileage Starting transmission
• Looks
• Comfort Power capacity mechanism
Most • After Sales
Preferred • Engine
Royal Enfield 1.45 19.80 bhp 346 cc 37 kmpl Kick / 5 speed
classic 350 lakh electric

• Price
Second • Transmission KTM 390 2.56 43 bhp 373.2 cc 25 kmpl Electric 6 speed
lakh
Preferred

Apache RR 2.37 34 bhp 312.2 cc 30 kmpl Electric 6 speed

• Resale Value 310 lakh
• Mileage
Last • Finance
preferred UM 2.74 24.80 bhp 279.5 cc 35 kmpl Electric 6 speed
commando lakh
PRODUCT LIFE CYCLE OF CLASSIC 350
CLASSIC 350 IS IN MATURITY PHASE

Steps taken by the Company:-

• Product Extension

• New Features in the model

ADVANTAGE OF CUSTOMERS OF CLASSIC 350
• MAKE AN ESTIMATE HOW MANY OF PEOPLE OF SUCH DIFFERENT
CATEGORY ARE THERE AND WHICH COMPNAY IS GOING TO BE IN THE
ADVANTAGE…
• THE LARGER THE NUMBER OF PEOPLE OF SIMILAR CATEGORY, MORE
ADVANTAGE TO THAT COMPANY…
• TRY TO GET NUMBERS OR MAKE AN ESTIMATE…
PROFIT FROM SALES OF CLASSIS 350
• TRY TO GET VALUE OF SALES FIGURES AND PROFIT COMPANY MAKES
BY SELLING THE NUMBERS OF CLASSIC 350. IF YOU DON’T GET THE
VALUES THEN PLEASE MAKE AN ESTIMATE BY YOURSELF FROM OTHER
VALUES…
COMPARISON
Volumes
Company Net Worth Revenue Sold Sales Value
5,27,737
Royal Enfield 5372.23 cr 7037.97 cr units 7037.97 cr
TVS 2216.04 c 12677.03 cr 4160 units 92.77 cr
26512.17 Cr 22707 units
BAJAJ 19103.86 (2017) (2017) 304.05 Cr
8500 units
KTM NA NA (approx) 203.15 Cr
7500000
Hero 24,480 Cr 31,480 Cr units 4,885 Cr