Royal Enfield has decided to restrict itself to under 650cc displacement in India as well as in foreign markets. The company will focus entirely in the range of 250-650cc displacement segment only. The Chennai based automaker has seen a steep rise in their sales chart for quite some time now and has acquired a 90 percent market share in India for their range of bikes. The company recently inaugurated a new production plant at Oragadam, Chennai to meet the rising demand for motorcycles. This plant will raise the production capacity to 1,75,000 units, up by 55 percent.
Many expected Royal Enfield to consider expansion in their displacement range as well. However the restriction in capacity is a smart move as the company doesn’t have to rival bigger and more established players like Harley-Davidson, Triumph, etc, who operate in the above 650cc segment. Royal Enfield doesn’t have much expertise in developing engines and the company has often taken help from powertrain experts like AVL to develop modern engines for their new range of bikes.
Royal Enfield bikes might be perceived as expensive by many but the niche in which the company offers its product is almost competition free. This along with the retro charm keeps the brand going strong in both Indian and overseas market. The company will launch the Cafe Racer Continental GT later this year, which will become their flagship model, priced in excess of Rs. 2 lakhs. The vehicle was showcased at the 2012 Auto Expo and will also be served in export markets, where it is expected to be very popular.