INCREASING CRAZE OF ROYAL ENFIELD IN KATHMANDU
INTRODUCTION
PROFILE OF THE STUDY
One of the most distinct things about riding is that nothing feels quite like a
motorcycle; the thrill of being at one with a two-wheeled machine that weighs only
a few hundred pounds is one of the purest ways to get from point A to B, and the
risks involve sometimes even heighten that enjoyment. It may have taken record
fuel prices to put motorcycles into the mainstream consciousness, but the fact that
bikes can get more than double the fuel economy of cars makes them serious
money savers, whether or not prices stay high.
With some many bikes achieving 60-70 miles per gallon and some scooters
pushing 100+ mpg, it's no wonder so many commuters choose to get to work on
two wheels.
If you're a rider you know all about "the wave," the pointed finger or wave of the
hand that acknowledges another rider as he or she passes.
Motorcyclists often feel like they belong to a big community, and that sensation
gives us something in common; we share a bond that sets us apart from the rest of
the motoring world.
In spite of the fact that motorcyclists are a part of a big group, we also tend to be
more individualistic than the next person. Whether that's expressed through our
personal style or the way we trick out our bikes, motorcycling can be an outlet
through which we can reveal our personalities. Whether or not you care about your
carbon footprint, motorcycles are efficient forms of transportation that impact the
environmental minimally. And even if you ride just for the thrill of it, there's
nothing wrong with being a little kind to Mother Nature every once in a while. Not
only are motorcycles allowed in most High Occupancy Vehicle lanes, in Texas and
California they’re allowed to ride between lanes. Chances are that a bike will get
you to work sooner, and you’ll also arrive more exhilarated than you would have in
a car. This point is bittersweet; though it's equalizing that a person riding a $13,000
Hayabusa can keep pace with a million dollar Ferrari, it can also be enormously
dangerous. So while motorcycles are performance bargains that offer more
performance per dollar than virtually any other vehicle, it's best to explore these
limits on a track. There's something about motorcyclists, isn't there? When a guy or
a gal walks into a restaurant with a helmet under arm, they invariably exude a
swagger and a sense of cool that just isn't the same as rolling up in a car. Whether
or not you're looking for the Peter Fonda or Brad Pitt effect, motorcycles take you
one step closer to cool.
What better way to escape than on a motorcycle? The sense of freedom feels
complete on two wheels, and riding doesn't transport you to a destination; it is the
destination.
In this era of cut throat competition, no company can survive in the market place
without knowing its product’s strengths and weaknesses. It has to fortify
(Strengthen) itself against threats from the environment and exploit its strengths for
increasing profits. In order to do so, the company has to conduct regular surveys to
know the customer’s opinions, needs, and preferences. This helps the company to
manufacture the product according to customer’s expectations. It has now become
more important for the customer confidence and higher positioning of buyer
perception. Thus, Surveys becomes genuine key to success.
The Bike segment is dominated by 4 major players: - HERO HONDA, BAJAJ,
TVS and ROYAL ENFIELD
Besides these, there are players like: - HONDA, LML, KINETIC, SUZUKI.
Royal Enfield has attained that cult status over the years and its popularity has only
increased on a YoY basis. So have its profits: almost started in the late 1800, the
Enfield Cycle Company, like BSA, was one of the leading weapons manufacturers,
which ventured into the motorcycle business. Amidst the ups and downs of the
company, it partnered with Madras Motorcycles in 1955 to begin RE production in
India. The Royal Enfield Bullet enjoys the distinction of being the longest lived
original design. The company was essentially a subsidiary, which after the closing
of the UK based parent company bought the rights to continue production and use
the name. A major reason behind the continuation of RE brand in India back in the
1960s was the government's search for a suitable motorcycle for military and
police patrolling forces. Like we know today, RE still enjoys that. Now how
ROYAL ENFIELD became a heartthrob among the Indian junta is another story
altogether. A majority of it can be attributed to Siddhartha Lal and co's dedicated
efforts to revive the brand by taking some incredible risks and working their asses
off to develop a powerful end product.
After taking over the Royal Enfield business in 2000, Siddhartha Lal. There was
nothing significant going on with the company at that point in time. Royal Enfield
was ever so fading in the blue, despite its implicit popularity. Everyone loved it,
but no one bought it. No one bought it, so many started forgetting it. It was in
2004, when Lal was given the baton to Eicher Motors Company as COO that RE
actually became a priority for them. The turnaround is typically denoted by these
numbers. If you invested as much amount in shares of the company as the cost of
the bike in 2000 (55,000 rupees), the return today will be approx 4.5 crores INR.
Company grew from strength to strength over the years thanks to Eicher Motors
calculated risks and good outsourced engineering, and of course by capturing the
Indian youths' fascination for this machine.
LITRATURE REVIEW
The expanding Kathmandu market, the growing size of the middle class and the
rise in aspirations of the youth along with opening up of the Nepal’s economy have
collectively influenced the steady growth of the two wheeler market in
Kathmandu. With leading foreign brands in collaborations with Indian
manufacturers entering the market of Kathmandu, the customer could not have
asked for more. In fact, the Nepal’s bike market has grown immensely and the
preference for variety looks, design has brought in a number of models in the
market.
In the last 3 to 4 years, the craze for motorcycle over the scooters has picked up
and one can find today even girls crazy for a motorbike not only in the Metros but
in small towns and cities also. Trying to catch up with these, manufacturers are
busy working out on customer profiles. With the increase in competition one can
find a think of discounts including: cash rebates and free accessories to push sales
of the commuter bikes. Certain changes are also visible as far as customer
preferences are concerned. The basic 100cc bike market is suddenly experiencing a
slowdown in the growth. This Commuter bike was a favorite till the other day,
commanding up to 90% of the total bike sales. The shift towards 150 cc bikes is
suddenly discernable and the segment is expected to grow in near future.
Manufacturers are now rushing in to introduce bikes in this segment. Bajaj has
launched *Pulsar-Dtsi 150cc *higher on the power ladder, Honda has come up
with *Unicorn *and TVS has recently launched *Apache. * The customer is the
basic ingredient of marketing. The development of marketing strategy is based on
understanding of consumer and their behavior. The present study attempts to
understand the behavior of consumer for their choice purchasing two-wheeler with
special reference to bikes like Honda (Unicorn) TVS (Apache), and Bajaj (Pulsar
150cc). But consumer behavior and the derived consumer satisfaction cannot be
intact. Now days the two wheeler industry is growing at its fast speed. The
competition is very hard and so many choices are available to customers. Here I
have tried to find out the level of customer satisfaction regarding (Unicorn,
Apache, and Pulsar) two wheelers and also what modification they want in their
products. So the study is all about the customer’s preference and their satisfaction
with regard to bikes coming under 150cc segment.
In the financial year 2015-16, Royal Enfield sold 4, 98,791 units, registering a
strong growth of 53 per cent over its sales in the last Fiscal Year 2015 of 3, 24,055
units. With this growth, Royal Enfield now takes position as one of the most
demanding motorcycle in Kathmandu, only behind Hero MotoCorp, Bajaj Auto,
Honda Motorcycle & Scooter and TVS Motors. When contacted, Royal Enfield
declined to comment on the development.
Royal Enfield's sales volume grew by 50 per cent in each of the past five years. To
meet rising demand, the company is setting up a new plant near Oragadam, which
will increase production capacity to 900,000 by 2018.
Yamaha lost out to Royal Enfield not only because of the latter's strong sales
numbers, but also due to Yamaha sales slipping in the last fiscal by 4.4 per cent -
from 3,48,313 units in Fiscal Year 2014-15 to 3,32,958 units in Fiscal Year 2015-
16. Yamaha's scooter sales however, has seen growth over the last fiscal - up 46.7
per cent from 2,16,960 scooters in FY 2014-15 to 3,18,450 scooters in FY 2015-
16, led largely by the Fashino. With the launch of the new 110cc commuter
motorcycle Saluto RX as well as the upcoming launch of the new scooter Ray-ZR,
Yamaha will be looking to shore up some more volumes in the coming months.
Royal Enfield has posted what is the company's highest-ever sales numbers in a
single month, selling 60,142 bikes in April 2017. Out of these numbers, sales in the
domestic market alone accounted for 58,564 bikes, recording a growth of 25 per
cent in the same period a year ago. In April 2016, Royal Enfield sold a total of
48,197 bikes. The sales are largely led by the best-selling Royal Enfield Classic
350, which made up over 68 per cent of Royal Enfield's sales in FY 2017. In all,
the Royal Enfield Classic 350 sold 4, 16,693 bikes in the period from April 2016 to
March 2017.
However, sales of Royal Enfield Motorcycles above 350 cc declined by 23 per cent
in April 2017, as only 3,793 bikes in this category were sold in that month,
compared to 4,938 bikes in the same category in April 2016. Royal Enfield models
above 350 cc category include motorcycles such as Royal Enfield Himalayan,
Royal Enfield Classic 500, Royal Enfield Bullet 500, Royal Enfield Thunderbird
500 and Royal Enfield Continental GT. Nevertheless, most Royal Enfield
motorcycles, particularly the 350 cc models, command a waiting period of 3-4
months across dealerships in the domestic market.
Royal Enfield is enjoying a purple patch. Month after month, the company has
been posting positive growth and sales as well. For the month of September 2017,
the company again recorded a positive growth, of 22 per cent and selling a total of
70,431 units, as compared 57,842 units sold in to September 2016 is. Out of 70,431
units sold in September 2017, 69,393 units were sold in the country while the
company exported 1,038 units. The company's sales for the period of April-
September 2017 was 3, 78,304 units, which itself is a growth of 23 per cent over
the same period last year.
Unit Sep- Sep- Growt
Sales 17 16 h
Domest 69,39 56,958
22%
ic 3
Exports 1,038 884 17%
Total 70,43 57,842
22%
1
Royal Enfield also launched two new variants of the Classic 350 and Classic 500
with new colors and subtle updates as well. Both motorcycles were fitted with rear
disc brakes and got new colors such as Gunmetal Grey for the Classic 350 and
Stealth Black for the Classic 500. Up next for Royal Enfield is the launch of its
first ever 750 cc bike, which will be in November 2017 and the Royal Enfield Tour
Of Bhutan, which will be held this month.
Royal Enfield has seen a growth of 30 percent in the sale of its 350 cc motorcycles.
The bikes in this list include the Royal Enfield Bullet 350, Royal Enfield and
Royal Enfield Thunderbird 350. The Bullet range also includes the ES which is the
rebadged Electra. In the first quarter of the financial year 2017-18 (the months of
April, May and June 2017), the company sold 169,252 units. The numbers in the
same month last year were at 130,162 motorcycles. The company in January
introduced the Royal Enfield classic Redditch Edition which appears to have
caught on with Indian buyers. This series includes Redditch Blue, Redditch Green
and Redditch Red color options.
The Classic 350 is the company’s bestselling model. The bike harnesses power
from a 346 cc single cylinder mill. The gearbox is a 5-speed unit. The engine is
capable of generating 19.8 bhp of maximum power at 5,250 rpm and 28 Nm of
peak torque at 4,000 rpm. The bike gets a disc brake in the front and a drum setup
in the rear. The same mill is used by Royal Enfield in its entire range of 350 cc
bikes. The Bullet is the world’s oldest continuous production motorcycle. The
company’s popularity has been increasing amongst youngsters due to its strong
brand recall value and classic appeal.
According to Mr.Haneef, Gnanadhas, Karim and Singhal (2006) in their study of 2
wheeler sector he has mentioned that Royal Enfield segment has recorded
significant Change in the past 4-5 years. The market for Royal Enfield is growing
and its sale rose by 27 percent annually during the last four years. He pointed out
that while the market for Royal Enfield is growing that for mopeds and geared
scooters is shrinking. This change in the taste of the consumers is possibly due to
the technological change. Also most of the manufacturers like Hero Honda, Bajaj
and TVS had reduced the prices of their entry level motorcycles in order to capture
a bigger share of the market.
According to Roy (2006) and Mohnot (2002) in their study of two and three
wheelers he out from the standpoint of means of personal transportation. The two-
wheeler has become an expression of the owners' personality. The (customer in
making his choice does evaluate the product in terms of utility, fuel economy,
reliability, maintenance, affordability, performance, good after -sales service at
reasonable cost, availability of a Study of Customer Satisfaction of Two Wheelers
on Yamaha parts at :economical prices, looks, safety and comfort and ease of
riding for driving. Total sales of two-wheeler in first eight months of 200 1-02 had
increased to 2.70 million units from 1.33 million units in the corresponding period
of the preceding year.
According to Siddhartha and Mukherjee (2002) the two-wheelers in India are used
for variety of work such as visiting people, carrying loads, outdoor jobs like selling
and buying. In rural areas it helps people to travel more frequently to nearby towns
to their daily needs. The two-wheeler has become a valuable support for increasing
productivity and in turn the profit, besides helping as a personal mode of
transportation.
According to Singh and Yasso (2001) they pointed out that a major part of growth
in the two-wheeler industry has come from motor cycles, which are considered fuel
efficient, reliable and its suitability on rough roads. As per his study, TVS-Suzuki,
Hero: Honda, Bajaj dominates the two, wheeler scene. The study also says that due
to stiff competition from automobile major Bajaj which is a largest producer of
scooters the LML is facing considerably stiff competition. However, dominance of
this category has been declining because of shift in customer preference towards
motor bikes.
Lutz (1981) in his study a perspective into consumer behavior is motivated by a
desire to understand the relationship between attitude and behavior
According to Sathish and Pughazhendi (2011) their research paper is aimed to
determine the customer’s perception towards the YAMAHA SZ-X motorbike. The
study has been conducted in Burdwan, a district town of West Bengal, India. In
total 100respondents filled the questionnaire. The respondents were distributed on
the, basis of their age and income group. The degree of satisfaction of the
customers for Yamaha SZ-X motor bike has been measured on the basis of scale
(excellent, good, average, moderate, low, very poor etc.).
Results reveal that consumers are very satisfied after using the product. Further
results show that there is a significant relation between the brand name and the
preference of customers. Hence, it has been recommended that the company should
focus on fuel economy, servicing cost of the bike inside the show room and spare
parts prices of the bike
