Amidst fierce competition in India's middleweight motorcycle market, Royal Enfield, a jewel in Eicher Motors' crown, faces formidable competition in India's middleweight motorcycle market owing to alliances like Hero MotoCorp-Harley Davidson and Bajaj Auto-Triumph.
However, Royal Enfield seems to have responded with consumer-centric offering, by partnering with Mumbai-based fintech startup, OTO Capital, to introduce an assured buyback program. The initiative aims to redefine motorcycle ownership, making it more accessible and convenient.
Royal Enfield's unique assured buyback program opens the door for new riders to savour the thrill of two-wheeled freedom without the commitment of full ownership. In collaboration with OTO Capital, the automobile firm plans to offer flexible financing with lower monthly payments for customers. They can choose a lease term, and at the end of the term, have the option to sell the motorcycle back with a guaranteed buyback value. This initiative seeks to enhance the motorcycle ownership experience and promote the ADV 2-wheelers segment in India, while simultaneously setting a new industry standard for customer-centric, hassle-free ownership. OTO Capital, a dynamic Mumbai-based finance startup, specializes in offering two-wheeler enthusiasts the opportunity to purchase their bike at the end of the lease by paying the residual amount, putting control and flexibility directly in the hands of the riders.
The program offers a range of benefits, including flexible lease durations spanning 1 to 3 years, reduced EMIs by up to 45%, and a guaranteed buyback value of up to 77%, contingent on the chosen tenure. Customers can look forward to a cash back incentive upon the lease's conclusion, as well. At the end of the assured buyback tenure, customers are presented with several options, either they can trade their motorcycle for a new Royal Enfield or retain their existing motorcycle, or even return it.
One of the most prominent benefits for customers is the combination of lower monthly EMIs and the assurance of a predetermined buyback value for their Royal Enfield motorcycle. This initiative sets a new industry standard by reshaping the conventional motorcycle procurement process and holds the potential to further stimulate the growth and development of the mid-size motorcycle segment in India.
This innovative program is set to reshape the motorcycle buying process in India. It aligns with Royal Enfield's commitment to providing a seamless and enjoyable experience for potential riders.
B Govindarajan, chief executive at Royal Enfield said, “At Royal Enfield we always prioritize the customer. Right from the stage of motorcycle conception and development, all the way to designing in-store and in-use consumer experience, we always endeavor to create what consumers want.”
Initially, the assured buyback program will be available at select Royal Enfield dealerships in 12 cities, including Delhi, Pune, Chennai, and more. However, Royal Enfield plans to expand the program to more cities in the near future, making this unique ownership model accessible to a broader audience.
The motorcycle division of Eicher Motors has also planned to invest its largest-ever annual budget of Rs 1,600 to Rs 1,700 crore for the fiscal year 2024. Out of this amount, Rs 1,000 crore will be allocated for creating new Royal Enfield products and expanding production capacity. This investment aims to prevent the company from missing out on sales due to a shortage of motorcycles.
This initiative comes at a critical juncture for Royal Enfield as it faces stiff competition in the middleweight motorcycle segment. Rivals such as Bajaj-Triumph and Hero-Harley have entered the market with their offerings. Royal Enfield aims to fortify its position by not only offering great products but also by revolutionizing the ownership experience.
Royal Enfield's assured buyback program is poised to disrupt the Indian motorcycle industry by offering a flexible and economical way for customers to enjoy the iconic Royal Enfield experience. It remains to be seen how this will influence the mid-size motorcycle segment in India and whether other manufacturers will follow suit.