Sales Drop: Royal Enfield Cuts Production by 50,000 Units

Royal Enfield is facing tough times in the era of mandatory ABS for bikes above 125cc. Not just that, the 5-year insurance rule has taken the effective on-road price up by a considerable margin. The manufacturer earlier had to cut the total number of bikes produced by 50,000 in November 2018. Now, another 50,000 unit production-cut was announced by the brand. The already manufactured number of Royal Enfield bikes is increasing at a fast pace as sales number saw a downward trend for the company. The best-selling Classic 350 was earlier retailed for INR 1.38 lakh while current price for the same is INR 1.62 lakh.

The first price hike came when they added a new swingarm and rear disc brake to the motorcycle. The addition of INR 10,000 to the price was wrong at that moment as they should have introduced both the ABS and rear disc brake at the same time. The total hike of INR 24,000 to the ex-showroom price should have been limited to just INR 15,000. Apart from this, the mandatory five-year insurance rule added four years of additional third-party cover to the on-road price. This was actually beneficial for the owners but added INR 5000 to the on-road amount.

The range of bikes now starts at INR 1.28 lakh for the dual disc Bullet 350. Also, the entry of Jawa into India made the fact sure that cult following for both the brands will divide again. Jawa may not have got such a huge number for themselves at the start but many potential Royal Enfield customers would have thought about getting more power and retro-modern styling for a minimal hike. Royal Enfield needs to work on its strategy for one more time and see how the numbers can be improved in such tough conditions.

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