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    Supply slumps amid peaking demand

    Friday, December 31, 2010

    It has been a little over a year since Chennai-based Royal Enfield launched the Classic 500 and 350 cruisers. But if a buyer, like 29-year-old Souman Bhakta, who works at the plush Indigo restaurant in south Mumbai, is interested in buying either of the two motorcycles, he would have to wait for nearly a year to lay hands on it.

    More than 10,000 people, who have booked the Classic, priced at over Rs 100,000, are made to wait for eight to 10 months for deliveries, as Royal Enfield is facing production crunch at its facility in Tiruvottiyur, Chennai.

    R L Ravichandran, chief executive, Royal Enfield said, “We are continuously ramping up production of the Classic series, but demand continues to be very high. From 1,000 to 1,200 units a month, we will reach the level of 1,400 units by January-February. In some parts of northern India, the wait is for six months, while in south, it’s even higher. We are working very hard to bring it down.”

    Skeptics may argue that waiting for more than half a year seems impractical today as options are plenty, but the strong brand positioning of Royal Enfield over the past many decades has generated several followers. “There aren’t any bikes in India which could replace Enfield models. Probably, the wait for the Classic series is totally worth it,” admits Bhakta.

    While the wait for Royal Enfield motorcycles is getting longer day by the day, German carmaker Volkswagen (VW) is also finding itself in a similar situation. With typical European sleek, modern looks and backed by German engineering, Polo and Vento have found many takers in India.

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