Royal Enfield starts assembling unit in Thailand, targets SE Asia

Royal Enfield, India’s largest retro, semi-premium motorcycle brand, said its third assembly plant outside India started operations in Thialand.

The plant, which will assemble the parts manufactured at the main plants in Chennai in India, will cater to markets such as Indonesia and Vietnam, besides the Thai market.

Due to ASEAN trade pacts, it is cheaper for companies to sell a product made in one of the ASEAN countries in the other ASEAN markets, compared to importing it from a non-ASEAN country like India.

RE will start with high-end models such as Himalayan, Interceptor 650 and Continental GT 650 when operations begin this month.

This is the third assembly plant outside India, beside those in Argentina and Colombia.

India is the global leader in motorcycle manufacturing, and RE — owned by Eicher Motors — has had tremendous success in appealing to the young, urban crowd with its semi-premium range of retro-looking bikes.

The company recently overhauled the technical and design aspects of its bike — an area that it has been traditionally weak on.

Despite the much-awaited overhaul, demand for premium motorbikes has taken a blow in recent months due to rising petrol prices, given that these bikes offer only around half the mileage per liter compared to traditional commuter bikes.

This may be one of the reasons why RE — which rarely had trouble finding customers in India — is doubling down on global expansion.

“With a strategic view to grow the business and cater to increasing demand, we have been pursuing our plans to set up local assembly units in priority markets beginning with Argentina in 2020 and then Colombia earlier this year,” the company said about its Thailand move.

“Thailand has been a critical market for Royal Enfield since the brand’s market foray in 2015. “Having made significant strides in the country and the APAC region, Royal Enfield is now amongst the top five players in the premium, mid-size motorcycle segment in markets such as Thailand, Australia, New Zealand and Korea,” it added.

The company’s two state-of-the-art production facilities are located at Oragadam and Vallam Vadagal, near Chennai.

It also has two research and design centers, in Bruntingthorpe, UK, and Chennai, India, and opened its first assembly unit outside India, in Buenos Aires, last year.