Royal Enfield's December sales tumble as Jawa makes a strong comeback

03/01/2019 - 14:18 | ,   | Suvil Susvirkar

Classic Legends, a subsidiary of Mahindra and Mahindra, reported an overwhelming response for Jawa Motorcycles. In fact, the bikes are sold out until September 2019. Classic Legends had stopped the online bookings for the Jawa and Jawa Forty-Two effective midnight December 25 and dealerships would continue to take bookings for deliveries beyond September.

Royal Enfield Interceptor 650 Side Profile Thai Mo
The strike at the Tamil Nadu plant, an increase in the cost of insurance and the addition of ABS has resulted in the fall in sales of Royal Enfield motorcycles.

Also read: Royal Enfield Interceptor 650 wins the IMOTY 2019 award

Where Jawa is gaining, arch rival Royal Enfield’s sales have suffered. Despite the positive response to the 650 Twins, Royal Enfield has reported a 13 per cent drop in overall sales. The company sold 58,278 units (both domestic and global) in December 2018 as against 66,968 units during the corresponding month in 2017. In the domestic market, the company sold 56,026 units as opposed to 65,367 units in December 2017 – a degrowth of 14 per cent.

Exports witnessed a 41 per cent jump as Royal Enfield sold 2,252 units in the international markets in December 2018 as against 1,601 units in December 2017. The jump in exports is associated with the launch of the 650 Twins in global markets. Royal Enfield had stated in the past that the 650 twins are manufactured in a single global-spec model that would be sold across the world.

Royal Enfield's sales in 2018 also suffered due to a strike at the company’s Oragadam plant in Tamil Nadu, which began on September 24. The 50-day strike resulted in a cumulative production loss of 25,000 motorcycles. October witnessed just 1 per cent growth in year-on-year sales while November saw a 4.1 per cent fall.

The increased insurance cost, the addition of rear disc brakes to its models and installation of ABS has resulted in an upsurge in prices, which can also be a factor for the temporary decline. The negative sales performance by Royal Enfield also affected the share prices of Eicher Motors that tumbled 10 per cent last Wednesday.

Jawa Pune Dealership
The Jawa Classic and Jawa Forty-Two are direct rivals to Royal Enfield's best-selling product range - the 350 series.

Also read: Benelli Imperiale 400 (Royal Enfield & Jawa 350 rival) Indian launch in H1 2019 - Report

The new Jawa motorcycles are a direct threat to the Royal Enfield's best-selling product - the 350 Classic range. Jawa is silent about its production plan and backlog, however, an Autocar Professional report says that Classic Legends have set a target of 90,000 unit sales for the first year.

The report adds that 200 motorcycles are being produced per shift at the Pithampur plant. Classic Legends aims to ensure good production quality before ramping up.

[Source: AutocarPro.in]

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