Classic Ride
    Category: Forbes Life By : Ardian Wibisono Read : 761 Date : Thursday, January 04, 2018 - 15:01:33

    Ahmad Zamroni / Forbes Indonesia

    India’s Royal Enfield entered Indonesia’s motorcycle market a few years ago, backed by a long heritage. It has identified Indonesia as one of four key markets worldwide for growth, along with Brazil, Colombia and Thailand. “We see big potential in Indonesia, especially in midsized engines, where there are few players and we have just the right products to offer,” says Royal Enfield Country Manager-Indonesia Irvino Edwardly. Irvino himself has a long background in the premium automotive industry. Prior to joining the Royal Enfield, he was chief executive of Maserati Indonesia and director of sales and marketing at Mabua Harley Davidson Indonesia.

    Royal Enfield focuses on the midsized engine motorcycles, from 350cc to 535cc, and classic design to appeal to hobbyists and the middle-class segment who want to upgrade their rides. Globally, Royal Enfield has had stellar sales growth over the past six years, growing by an average 50% annually from just 50,000 units in 2010 and expecting sales to reach over 825,000 by the end of 2017, much of that in India.

    Meanwhile, in Indonesia, the motorcycle market has been challenging for the past few years. Sales have been going down after peaking in 2011 at 8 million units, with annualized sales for 2016 at 5.9 million, according to AISI, the country’s motorcycle association. Yet Irvino is nonplussed, noting that Indonesia is the world’s third largest motorcycle market after China and India.

    Royal Enfield is not the only one who sees the opportunity. With new regulations that add a 125% tax to the price of any bike above 500cc, the market has shifted to bikes below 500cc. Competitors have started to introduce new models in this segment, such as the 400cc Ducati Scrambler and the 300cc Vespa GTS Super Sport. Royal Enfield has several strategies to stay head of the competition. Royal Enfield has a wide range of models with a relatively narrow range of engine sizes, such as the Bullet (350cc and 500cc), Classic (350cc and 500cc along with several custom options), Rumbler (500cc) and Continental GT (535cc).

    Also, unlike other brands that want to be seen as luxury items and priced as luxury as well, Irvino wants to make Royal Enfield an affordable item. Except for the Continental GT that is priced over Rp 170 million due to the luxury tax, the other models start from just above Rp 64 million to Rp 98 million. Royal Enfield also works with financing companies to offer attractive financing packages as well.

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