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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (5467)	8/4/1999 10:51:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

Royal Enfield to roll out new models royalenfield.com Gouri Agtey Athale PUNE 4 AUGUST FROM being a single product motorcycle manufacturer for decades, Royal Enfield Motors (REM) will launch several new bikes, all in the high performance segment in the current financial year. “We will continue to remain a 'big' bike manufacturer though we will expand our range over the next few years,'' P K Purang, managing director, REM, said. He added that REM's strategic business plan for the next three years envisioned introducing bikes from 250cc onwards to maintain its status as a “premium'' product. REM is the sole producer of 'big' bikes in the country. Due to import restrictions, REM has no competitor. The company had been operating under “capacity constraints, which lead to a loss in sales and created a pent up demand,'' said Mr Purang. However, with the Jaipur plant beginning commercial production in the first quarter of the current year, pressure would ease, he added. REM plans to launch a 535cc bike in the third quarter of the current year and a 624cc bike by April 2000. This is in addition to the 500cc Lightning, already launched, and the Machismo A 350, launched today. The 624cc, five-speed bike will have left hand brakes. REM has set a price band of Rs 65,000 to Rs 1.20 lakh for these products. Mr Purang was in Pune for the national launch of the Machismo A 350, a four-stroke, 346cc bike, which gives 47-50 kms per litre under ideal driving conditions. It will be manufactured at the Jaipur plant. The bike, priced at Rs 63,205 (ex-showroom in Pune), compliant with the April 2000 emission norms, will be launched in a phased manner across the country. The Jaipur plant, set up with an investment of Rs 40 crore, will have an installed capacity of 24,000 bikes annually. With this, REM's capacity will be 50,000 per annum, since the Chennai plant has a capacity of 30,000. With marginal additional investments, capacities at Jaipur will go up to 36,000, Mr Purang said. REM, a business unit of Eicher Ltd, expects to sell 9,000 units of Machismo A 350 in the first year. REM had a turnover of Rs 135 crore in 1998-99. It sold 25,000 units and expects to touch Rs 175 crore in the current year, with a target of 35,000 bikes. Exports account for four per cent of production, which REM expects to increase to 10 per cent by 2000-1 and to 20 per cent in the next three years. It has already set up a warehouse in the US. Dismissing as a “myth'' that sales are buoyed by government procurement, Mr Purang said these accounted for less than 10 per cent of total sales. “We expect our new products, targeted at the young, to grow much faster,'' he added.