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India's Royal Enfield to begin making motorcycles in Thailand

British-bred brand looks to win over ASEAN with cult image and low prices

Royal Enfield motorcycles are substantially cheaper than other models in Thailand, where its sales doubled in the last fiscal year.   © Reuters

BANGKOK -- India-based motorcycle maker Royal Enfield is setting up an assembly plant in Thailand next year as it continues its Southeast Asian expansion drive.

The Thai facility will be the second overseas plant for the company after its factory in Argentina. It is scheduled to begin operation by the end of September.

On Thursday, U.S.-based Harley-Davidson announced its withdrawal from the Indian market -- a stark contrast to Royal Enfield's efforts to expand globally.

One of the oldest motorcycle brands in the world, British-bred Royal Enfield has survived two world wars and has seen 2019 year-on-year sales in Thailand more than double to 3,146 units.

Encouraged by growing sales in Thailand, the company is setting up the assembly plant as a hub for exports to other countries in the Association of Southeast Asian Nations, including the motorcycle-intensive markets of Indonesia and Vietnam.

Thailand is the largest automobile manufacturer in Southeast Asia, hosting primarily Japanese, U.S. and Chinese automakers. In the motorcycle sector, Japan's Honda Motor and Yamaha Motor as well as Harley-Davidson have set up factories there.

Royal Enfield motorcycles were first produced in Britain in 1901. After the parent company ceased operations in the U.K. in the early 1970s, its Indian operations took up the slack. In 1994, the company was acquired by Indian commercial vehicle maker Eicher Motors, which now owns the iconic brand.

"We are bringing our success from India into Thailand with the goal to be number one in the midsize motorcycle market in Thailand," Royal Enfield CEO Siddhartha Lal said in a statement, referring to motorcycles in the 250 cc to 750 cc class.

The Thai factory will be a completely knocked-down facility in Chachoengsao Province, part of an industrial zone the government has been keen on promoting. Such factories assemble individual parts into finished vehicles. At least 40% of parts will be local, while the rest would be shipped from India, with operations expected to start in April 2021.

A source at Royal Enfield said the company will be able to produce 4,500 to 5,000 units in the first year, which is also the target for sales. "I think we have been gaining a greater customer base in Thailand due to our accessible prices and marketing events designed to create Royal Enfield's [customer base] in Thailand," the source said.

The price of the popular Interceptor-650 model is around 219,000 baht ($7,000) -- well below other brands in roughly the same class, which cost around 800,000 baht.

Royal Enfield has 36 showrooms in Thailand and has entered other ASEAN countries including Vietnam, the Philippines, Malaysia and Indonesia over the last few years.

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