The strike at Royal Enfield’s Oragadam plant in Tamil Nadu, which began on September 24, has been called off after 50 days of protest. The strike was called off on Monday evening. The Royal Enfield Employees Union (REEU) demanded to reinstate 120 probationary workers and one permanent employee to their jobs. The union also demanded a bonus that was said to be pending since 2015. It is to be noted that REEU is not recognised by the management.
The protest at the Oragadam plant affected the production significantly. The company reported a cumulative production loss of 25,000 motorcycles for September and October 2018 due to the strike there. The strike also resulted in a tumbling stock value of Eicher Motors in the market as it fell by 26 per cent in the last two months. In a statement released last month, Royal Enfield said:
Royal Enfield’s manufacturing facility at Oragadam remained operational through the month of October 2018, even though a part of the workforce continued to stay away from work since September 24, 2018. Due to the strike, the loss of production for the month of September and October was 25,000 motorcycles.
Regarding sales performance, Royal Enfield registered year-on-year sales growth of 1 per cent in October 2018. The company sold 70,451 motorcycles in October 2018 against 69,492 units in October 2017. Exports witnessed a sharp fall of 72 per cent as the company shipped only 407 units in October 2018 against 1,478 units in the same month last year.
It was feared that the strike would result in a delayed India launch and deliveries of the new Royal Enfield 650 Twins. However, the company has remained on schedule, and the Interceptor INT 650 and the Continental GT 650 would be launched in India on 14 November, 2018. The motorcycles, as confirmed by Royal Enfield’s CEO, Siddhartha Lal, would be shipped to major markets by the end of 2018. Siddhartha Lal said:
We will start shipping the models to major markets by the end of this year, when the bikes will be at stores for display and test rides. We are looking at retail sales by early next year.
The 650 Twins share the same underpinning but sport unique styling and ergonomics. Both motorcycles use the company's new 648 cc, parallel-twin cylinder, SOHC, oil-cooled, 8-valve engine that is mated to a 6-speed gearbox with a slip-assist clutch as standard - a first on any Royal Enfield. The motor will deliver maximum power output of 47 bhp at 7,100 rpm and peak torque of 52 Nm at 5,200 rpm.