Hero MotoCorp, an Indian company, is planning to make its debut in developed markets by introducing electric scooters operating under the Vida brand. As per the company’s plan, it will launch its brand in the UK, France, and Spain by middle of 2025. Hero is making its first foray into the markets of the UK and Europe with the intention of capitalizing on the rising demand for electric vehicles in these regions.
The action, which coincides with ongoing discussions between India and the United Kingdom regarding a free trade agreement, has the potential to reduce tariffs in the automobile industry, thereby giving additional prospects for growth.
Niranjan Gupta, the chief executive officer of Hero, was quoted by a media outlet as saying that the strong customer mood in these regions towards their electric scooters was underlined. In order to successfully manage the transition towards electric transportation, the corporation, which is already a key participant in Asia, Africa, and Latin America, intends to capitalize on this kind of enthusiasm.
However, analysts feel that in order for Hero to achieve success in these developed regions, it will be necessary for the company to provide products that are more expensive and premium. This is a market sector in which Hero has not yet established a solid presence.
An Alliance Between Hero and Harley-Davidson
Due to Hero’s existing collaboration with Harley-Davidson, the company is able to manufacture motorcycles for the Indian market that are associated with the legendary brand. As the existing relationship between the two companies is only confined to India, Gupta pointed out that the expansion of Harley-Davidson’s shipments to the United Kingdom would be contingent on future agreements with the Milwaukee-based company.
The expansion of the company into Europe comes at a time when India’s vehicle emission rules, which were upgraded in 2020, are now in compliance with worldwide laws, which opens up new opportunities for Indian manufacturers. The imposition of higher tariffs on Chinese imports has opened up new opportunities for Indian manufacturers such as Hero to sell their products in developed countries. However, Hero will have the issue of successfully presenting its luxury motorcycles alongside its electric scooters in areas that are accustomed to higher-end models. This will be a challenge for Hero because it will be difficult to navigate the competitive landscape.
Hero Motocorp’s Sales Report Card of August 2024
For the month of August 2024, Hero MotoCorp announced sales of 512,360 units, which is a month-on-month increase of 38 percent. Year-to-date sales for the automobile manufacturer have increased by 8% when compared to the same period in the previous year. During the month of August 2024, other automotive manufacturers, on the other hand, had a decreasing trend.
The total number of vehicles sold by Tata Motors was 71,693 less than the 78,010 units that were sold in August 2023. This is an 8.1% decrease in overall sales. In a similar vein, Maruti Suzuki, another significant player in the automobile industry in India, saw a decrease in overall sales of 4% compared to the previous year.
This is a name that needs no introduction. Harley-Davidson Inc. was founded in 1903 and is headquartered in Milwaukee, Wisconsin in USA. It is one of the world’s largest motorcycle manufacturers and a brand with a loyal following. The iconic brand is famous for the chopper motorcycle style with manufacturing factories spread over York-Pennsylvania, Milwaukee-Wisconsin, Manaus-Brazil, Bawal-India, and Pluak Daeng-Thailand. Not only does the company market its products globally, but it also licenses and markets merchandise like apparel, home décor, ornaments, accessories, toys, scale models of its motorcycles, and video games based on its motorcycle line under the Harley-Davidson brand.
The first motor-bicycle was built by 20-year-old William S. Harley along with his friend Arthur Davidson by using the northside Milwaukee machine shop which was located at the home of their friend Henry Melk. The finished bike in 1903 did not have the power to climb hills without pedal assistance and the makers wrote off their first attempt as a learning curve.
Their second attempt was successful with a bike that featured a bigger engine and loop-frame design as it marked their path to future designs of motorcycles. This prototype of the new loop-frame Harley-Davidson was functional by September 8, 1904. It, then, competed in a Milwaukee motorcycle race and was placed fourth.
By January 1905, Harley-Davidson placed small advertisements in the Automobile and Cycle Trade Journal. These advertisements offered bare engines for do-it-yourself projects. The business did well and by April of the same year, the company was producing a limited stock of completed motorcycles.
Within a year, by 1906, Harley and the Davidson brothers built their first single-storey, wooden structure factory on Chestnut Street and produced 50 motorcycles. Chestnut Street was later renamed Juneau Avenue, which also serves as the current location for the Harley-Davidson Corporate Headquarters.
History of Harley Davidson Motorcycle
By 1907, the company expanded its factory and increased its annual motorcycle production to 150 motorcycles. It was also the year that the company was officially incorporated. The company began selling its bikes to police departments as well.
Over the next few years, Harley-Davidson continued making improvements to the engine and the bike design and by the year 1914, Harley-Davidson was pulling ahead of Indian-dominated motorcycle racing and also increased their bike production numbers to 16,284 machines.
World War I proved to be a major sales push for the company as the military demanded motorcycles as the US entered WWI in 1917. It purchased more than 20,000 motorcycles from the company. To recruit more domestic customers for its motorcycles, the company launched a line of bicycles in the same year but discontinued it in 1923 due to disappointing sales. However, by the year 1920, Harley-Davidson had grown to be the largest motorcycle manufacturer in the world with dealers in 67 countries. They were producing a whopping 28,189 machines annually.
A few years later, The Great Depression began which negatively impacted the company and its sales dropped from 21,000 machines in 1929 to 3703 machines in 1933. It emerged from the Great Depression scathed but alive and was only one of the two American motorcycle manufacturers that survived. It again rose to its former prominence as it reproduced a large number of machines for the US army during World War II. Harley-Davidson received two Army-Navy ‘E’ Awards, in 1943 and 1945 respectively, for ‘Excellence in Production’. It also resumed civilian production of large V-twin motorcycles that were successful on racetracks and with private buyers.
The company evolved and by 1970, it become a lifestyle brand that sold jackets, vests, T-shirts, and various memorabilia to commemorate the Harley-Davidson lifestyle. By the 1980s, people were economically progressing after a long financial hiatus that led to soaring sales for the company.
A Screenshot from the Harley Davidson Website
The Recent History
The decade of the 1980s proved to be immensely profitable for the company. The group that consisted of Harley-Davidson motorcycle owners grew to 90,000 members and the company registered a profit of approximately USD 3 million in 1984. This number rose by another USD 1.5 million within a few short years. Harley Davidson continued on its growth trajectory right into the 21st century. By the year 2006, it reported aprofit of approximately USD 1 billion as its core owners’ group reached middle age and the stock price of the company peaked. However, it was also the last successful year of the company.
The Fall
The iconic company that had survived and grown through two world wars and The Great Depression fell victim to the economic recession of 2007 and it struggled with sales and stock prices plummeting between 2007 and 2009. This abruptly stopped the company’s new efforts to market its product to a younger and new audience that included women and children.
To survive this newest threat of the economic downturn, it reverted to producing bikes that its existing customer base wanted, resulting in loud, chopper styles and bulky motorbikes.
Harley Davidson – Total Worldwide Retail Sales
What they failed to take into account was that their current core customer base was aging and the brand had missed its chance of evolving with the times. By 2008, the average age of a Harley-Davidson owner was 50 years and the younger generation did not identify with the company’s bike styles or ethos. This was in addition to the high price point of the motorbike which made it unaffordable for the younger generation that did not have such high disposable incomes. The third strike against the brand was that its image was associated with middle-aged men and father figures.
Conclusion
The iconic company that, at one time, was at its peak and the leading manufacturer of motorbikes across the world, has failed to recover post the 2007 recession. Although its sales are better, it has not been able to capture its pre-recession numbers. The main issue is that their bikes do not attract the millennials at all. Today, a company that has survived multiple ownership arrangements, subsidiary arrangements, intense global competition, and periods of economic health and product quality is struggling for survival. Only time will tell if the company will succeed in reversing its fortunes.
Harley-Davidson motorcycles are built to with sturdy construction and innovative engines. Many parts are also easily replaceable, allowing riders to keep their bikes in top shape without needing to replace the entire machine.
What was the first Harley Davidson model ever produced?
The first Harley-Davidson motorcycle was built in 1903 and was named the Harley-Davidson Model 1.
Does Harley-Davidson sell lifestyle products?
Yes, Harley-Davidson sells lifestyle products like jackets, vests, T-shirts, and various memorabilia like home décor, ornaments, accessories, toys, and video games based on its motorcycle line.
What is the most popular Harley?
Some of the most popular Harley-Davidson models include the Sportster, Dyna, and Softail.
Royal Enfield is easily one of the biggest brands from India founded by and has broken records in selling its motorcycle in India and abroad. But this wasn’t the case 20 or so years back, as Royal Enfield then was sitting on brink of bankruptcy. The automotive company has achieved its best-ever sales with over a million bikes that are sold worldwide. The company’s sales have also increased to about 27%.
Imagine if you brought a Royal Enfield motorcycle in 2001 you would now only have an old rugged bike. But if you would have invested the same amount in shares of Eicher Motors, the company that makes Enfield bikes your investment will be worth Rs 3.53 crore now. Despite operating in a niche segment, Royal Enfield remains one of the most admired motorcycle brands in India.
Royal Enfield is one of the flagship companies of the US 1.1 Billion Eicher Motors. It is an Indian motorcycle company with factories in Chennai, India. The company makes the Royal Enfield Bullet and other single-cylinder motorcycles. The company was established in 1955 and is one of the oldest motorcycles companies.
It first started out as a brand of the Enfield Cycle Company, a British manufacturing firm, then went out to produce the 500 cc bullets. It is a leading manufacturing company that manufactures bullets across the globe, was looking to upgrade its IT infrastructure using industry-leading solutions.
It has manufacturing plants in Thiruvottiyur, Chennai, Oragadam Chennai, Sipcot Industrial plant, Chennai and Campana, Argentina. The tagline of Royal Enfield is “Jab Bullet Chale Toh Duniya Raasta De” which sums it all quite beautiful as it is definitely a motorcycle that enjoys an overpowering presence as people have had to make way for it.
History of Royal Enfield
The Enfield Manufacturing Company Ltd was set up in England to manufacture bicycles. The company manufactured its products under the Royal Enfield Brand.
Not being satisfied with a limited product line of just bicycles, Enfield Manufacturing soon decided to focus on building other types of vehicles. In the year 1899, it started manufacturing a quadricycle called the Royal Enfield Quadricycle which was powered by a rear-mounted engine.
Royal Enfield Quadricycle
In 1901 Enfield manufacturing launched its first motorcycle fitted with a 239 cc engine. As a part of the global expansion strategy, Enfield started selling motorcycles in the Indian market in the year 1949.
In 1955, the Indian government placed an order for eight hundred 350cc Royal Enfield motorcycles for use by its police and armed forces. The Royal Enfield motorcycles were considered an ideal choice for the Indian army for patrolling the country border.
In 1990 Royal Enfield collaborated with the Eicher group an automotive company in India and merged with it in 1994.
In 2000 the company’s sales hit a low of 2000 units per month because it was suffering from problems like poor quality of its products, outdated design, change in taste and preference of customers and the entry of Japanese two-wheeler manufacturers in the Indian market.
Despite having a cult following among its fans many prospective customers saw Royal Enfield Brand as a relic from the past.
The man who is responsible for the tables to turn for Royal Enfield is none other than Siddhartha Lal is the man who is singularly responsible for Royal Enfield. Mr Lal has been credited with being able to make Royal Enfield a bike that is sold worldwide because of his dedication to the company. It was 2004 when Lal had taken over as COO of the Eicher group.
Siddhartha Lal – Former CEO of Royal Enfield
The group had a diverse spread of about 15 businesses including tractors, trucks, motorcycles, components, footwear and garments but none among them were a market leader. Lal decided to divest 13 businesses and put all money and focus behind Royal Enfield and trucks, two businesses where he believed the group had a genuine shot at leadership.
Lal decided to put his full force behind Royal Enfield and the trucks business. Immediately after taking over as CEO, Siddhartha analyzed the strengths and weaknesses of Royal Enfield and started to come up with a strategy to put the brand on its path to revival.
Buying Out Royal Enfield
The brand was surviving well in India until Japanese motorcycles began to enter the Indian market. This is when Mr Lal’s father who owned a tractor manufacturing company and was familiar with the way parts from Royal Enfield worked, swooped in to save the brand. Enfield was one of the biggest companies in South India, especially in the 60s and 70s.
Mr. Lal describes that “It was a bit of a tricky moment, and the firm was going bankrupt that’s when we bought it. My father got to know the people who were running the business because he was buying auto parts from Enfield for his tractor company. But we kept only one tiny portion which was the bullet factory and did not change the design because we liked the shape and the classic looks. We kept the character of the motorcycle, we kept the looks of the motorcycle, but we upgraded it to be relevant to people today.”
In order to pull the brand back from the edge of bankruptcy, the team decided to return to the brand’s roots to look for solutions that could help it soar once again. It is the only automobile Indian company that dint have a Japanese collaboration.
Speaking about this time, Mr Lal said, “They consulted many countries like US, Germany, Italy Austria and the UK to develop an engine or motorcycle, and felt that the UK understood us better.”
We found that engineering support that we could get in the Midlands was second to nowhere else in the world. In the Midlands, the team created the signature Royal Enfield Twin inceptor, which is what gave the bikes an additional boost of power that made them ideal for riding on the highway. This was a huge deal for the brand.
They had tapped into a huge consumer need that was not very vocalized. This allowed the brand to reinvent itself and become a lifestyle product that completely fit into the vibe of travelling and getting out in the world. This has made Royal Enfield quite popular with bike enthusiasts, making it the go-to bike for people who love to travel.
Increase in Sales
In 2005, the company was selling only about 25,000 bikes every year and needed a manufacturing scale and a fixed cost had to be spread around 100,000 bikes. Siddhartha Lal engineered and improved Enfield bikes by riding hundreds of kilometres himself and also initiated a motorcycling culture in the team. Under Lal, as quality improved, sales grew too.
By 2010, the company was selling 50,000 bikes, but on three platforms. That was when Lal decided to build all Enfield bikes on a single platform to maximize economies of scale. The Enfield Classic, launched from this single platform, caught the fancy of customers. Sales shot up six times in half a decade from 50,000 units in CY10 to 589,293 in CY14.
At this point, the sales were just enough to help the company break even. But soon, the tech economy in India began to boom in 2010, which brought about a turning point for the brand. Now, Eicher Motors earns over Rs 8,738 crore in revenues and makes a net profit of Rs 702 crore (FY14). Royal Enfield brings in about 80% of these profits.
Royal Enfield Bikes Sales Volume
Future of Royal Enfield
The prices of Royal Enfield were higher than that of the low powered Japanese motorcycle brands sold in India, but they were cheaper than the major global brands. And in order to keep the motorcycles affordable in the price-conscious Indian market, the company did not revise its prices even after the prospects of the brand started to improve in terms of sales.
Royal Enfield Model
Ex-Showroom Price
Royal Enfield Classic 350
₹1.52 lakhs – ₹2.18 lakhs
Royal Enfield Bullet 350
₹1.24 lakhs – ₹1.6 lakhs
Royal Enfield Thunderbird 350X
₹1.55 lakhs – ₹1.58 lakhs
Royal Enfield Himalayan
₹1.66 lakhs – ₹2.23 lakhs
Royal Enfield Interceptor 650
₹2.77 lakhs – ₹3.1 lakhs
The strong pricing power of the Royal Enfield brand and the improved operating margins rapidly increased the valuation of the company. In 2014, Royal Enfield recorded sales of 302,592 units.
The sales for the year were higher than even the worldwide sales of Harley Davidson for the first time in the brand history. By the year 2015, Eicher Motors had become one of the most expensive automobile stocks in India.
Eicher Motors Stock Price
As of Feb 2022, the stock price of Eicher Motors is ₹2,615.10.
Royal Enfield is an Indian motorcycle manufacturing company headquartered in Chennai, Tamil Nadu, India.
Who is the founder of Royal Enfield?
Robert Walker Smith and Albert Eadie founded Royal Enfield in 1955.
Who makes Royal Enfield motorcycles?
Eicher Motors Limited is the parent company of Royal Enfield that makes Royal Enfield motorcycles.
What is so special about Royal Enfield?
It provides a sense of strength and also a rustic charm. The brand has built itself from being an army bike to a cult classic. These bikes have a huge fan following and also there are several biking clubs exclusive to Royal Enfield motorcycles.
Tesla, the electric vehicle manufacturer of Elon Musk, is set to start selling its base model in India in the near future. While many of its fans in India were jubilant about Tesla’s entry, capturing the market can be the most daunting challenge the company has had until now. A Bloomberg article notes that Elon Musk is negotiating the opening of showrooms and possibly a factory with other Indian states Galuru branch. In India less than 1% of vehicles sold are electric vehicles, according to the Bloomberg report. The launch of Tesla’s business in India will pose a significant challenge for the company. Let’s have a look at the Challenges and Difficulties Tesla might face in India.
Elon Musk’s clean energy and electric vehicle company Tesla will start operations in India early next year, confirmed Union Minister for Road Transport and Highways Nitin Gadkari.
Tesla is initially expected to sell its vehicles in India, and Tesla would also look at setting up a manufacturing facility at a later stage depending on demand, Gadkari told The Times of India. At a recent media event, Gadkari said there is focus on developing electric cars and added that a lot of Indian firms are also looking at developing electric cars. Ultimately, Tesla ended up setting up its unit in Bengaluru.
India announces steps to improve the country’s Electronics sales but they may not be sufficient to increase the sales of Tesla’s costly EVs. In 2015, India launched the Faster Adoption and Development of Hybrid and Electronic vehicle (FAME), which includes a INR 900 crore pledge to subsidies for electric tricycles for busses, as per the International Energy Agency, with a Faster Adoption and Development of Hybrid and Electronic vehicle (FAME). Another FAME program with INR 10,000 Crore was launched in 2019 to enable people to buy electricity supplies and build charging infrastructure. In addition, by August 2019, the government has reduced the Goods and Services Tax GST on electricity vehicles to 5 percent.
The tax rates for cars in India are one of the highest in the world. This includes a 28% Goods and Services Tax (GST) and charges ranging from 3% to 22%. Though subsidies for electric cars exist in places like New Delhi, they are not sufficient for more people to afford Tesla’s cars. High taxes deter demand, and thus the attractiveness of economies of scale to consumers is reduced for manufacturers. For international brands, that was disastrous. Toyota announced last month that further growth in India will be stopped due to high taxes. Harley Davidson’s decision to leave the market recently was allegedly attributed to higher taxes. Last year, Ford announced its move to a joint enterprise for the most part of its assets. So, it will be challenging for Tesla because big companies are pulling out because of higher taxes.
In India, Tesla’s greater challenge is pricing. Given that Tesla’s costly bids would not be eligible for EV subsidies in this region, Bloomberg New Energy Finance (BnEF) Analyst Allen Tom Abraham told Bloomberg that the top limit for EVs in India to eligible for subsidies is INR 15 lakh. It is worth noting that Tesla Mode l3, built in China, is started at 2,65,740 yuan or almost $41,000. The cost of crossing Model Y from Shanghai begins with 339,900 yuan. In addition to the price the export prices and charges on the Tesla cars will not be met for the majority of customers when they arrive in India.
It is about half that of China’s average prices and just 25% of USA’s average vehicle prices. This suggests that Tesla’s cheapest car in India will attract just around 1% of the market, says Abraham. Tesla would therefore have a marginal sales volume in India. While Tesla is facing challenges, India’s demand for electricity is now at a rising stage and, according to a study conducted by Council of Energy, Environment and Water (CEEW) for Energy Finance, Energy value in India could reach up to $206 billion in the next decadence. If it is to succeed, Tesla must keep its commitment to India. This is not the first time that Tesla CEO Elon Musk promises to visit India, as most musk watchers know.
Tesla would open its Model 3 vehicle pre-bookings, and deliveries would take place later this year. In India, the other Tesla models will be Model X, Model S, and Model Y, with approximate prices of INR 2 crore, 1.5 crore, and 50 lakh respectively. There is no chance of the business working with dealer companies in order to sell their vehicle. Potential buyers should note that while Model 3 is one of the more affordable cars in Tesla, it is not cheap to get to India, since it will be fully-built (CBU) cars with a high import duty. Although the prices are not confirmed, reports show that Tesla Model 3 could cost INR 55 lakh in India.
As of April 2021, they are not. But Tesla has already set up its unit in Bengaluru so it is assumed that they will be made available very soon.
Where has Tesla set up its Units in India?
Tesla has set up its unit in Bengaluru, India.
What will be the prices of Tesla in India?
It is expected that the pricing for Tesla in India will start from INR 55 Lakhs.
Why is Tesla so expensive?
Tesla’s cost more than average cars due to its use of cleaner energy sources and it’s advanced technologies. In India, other than import taxes they will also not be eligible for EV subsidiaries in India. This would be a challenge for Tesla.
Which Tesla car is coming to India?
Tesla Model 3, Model Y, Model S, Model X with approximate prices of INR 55 lakh, 50 lakh, 1.5 crore and 2 crore respectively.
Shalini Rath
