Royal Enfield To Shut Down Several Regional Offices
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Iconic Indian motorcycle brand Royal Enfield has decided to shut down as many as 12 regional offices, including its corporate office in Gurugram as part of latest cost-cutting measures in the midst of the coronavirus pandemic. An internal circular made the announcement to Royal Enfield employees that all regional teams across the country will continue to work from home, and that the lockdown has already “provided an opportunity to pilot the work from home set up.” Offices in Gurugram, Chennai, Bengaluru, Mumbai, Jharkhand, Hyderabad, Bhubaneshwar and others will be shut down immediately.
The circular stated that “the admin team has begun the process of renegotiating the terms for an early exit for the remaining RO (regional office) locations, where the lock-in period is beyond one year, but sales, service, apparel employees in these regions will continue on a work-from-home basis.”
Royal Enfield’s international sales are led by the Interceptor 650 and Continental GT 650
A spokesperson has confirmed the development. More details are expected to be announced soon. The move comes at a time when the ongoing coronavirus pandemic and subsequent countrywide lockdown across many countries in the world have hit sales and revenue hard for most businesses. The Indian auto sector has been no exception either and has been facing increasing pressure after a countrywide lockdown which saw near-zero sales in April for Royal Enfield and a 69 percent sales decline in May 2020.
“The company’s manufacturing and retail operations were suspended between March 23 and May 5 as per government directives.”
On June 12, 2020, Eicher Motors, the parent company of Royal Enfield announced its financial results for the fourth quarter, which reported a decline of nearly ₹ 300 crore in revenue from total operations. Royal Enfield’s Chief Commercial Office (CCO) Lalit Malik confirmed the decision to shut down regional offices after announcing the March quarter results. The last quarter of this fiscal was particularly challenging in the wake of the unprecedented coronavirus pandemic, Royal Enfield said in a statement. The company’s manufacturing and retail operations were suspended between March 23 and May 5 as per government directives. The company has since resumed operations and more than 90 percent of its retail network is now operational.
Apart from popular models like the Bullet, Royal Enfield is expected to introduce several new models in the next 3-4 years
Despite the challenges, Royal Enfield continues to remain bullish. Chief Executive Officer Vinod Dasari said in a statement that Royal Enfield has had the best ever export performance in international markets during the year with a 96 percent increase compared to last year. And Royal Enfield continues to strengthen its distribution network in India and international markets. In the January to March 2020 quarter, Royal Enfield added 100 new Studio Stores, taking the overall retail touchpoints to 1,521 across India, with 921 dealerships and 600 Studio Stores.
Questions & Answers
Q.What is the primary reason Royal Enfield is closing its regional offices?
What is the primary reason Royal Enfield is closing its regional offices?
The closures are part of cost-cutting measures implemented during the coronavirus pandemic. The company has faced significant sales declines and a substantial drop in revenue from its operations.
Q.Which specific offices are being shut down by Royal Enfield?
Which specific offices are being shut down by Royal Enfield?
Offices in Gurugram, Chennai, Bengaluru, Mumbai, Jharkhand, Hyderabad, and Bhubaneshwar are being shut immediately. The company also aims to renegotiate terms for other regional offices.
Q.How has the work-from-home model influenced this decision for Royal Enfield?
How has the work-from-home model influenced this decision for Royal Enfield?
The lockdown provided an opportunity to pilot the work-from-home setup. An internal circular stated that regional teams across the country will continue working remotely.
Q.How have Royal Enfield's sales and revenue been affected recently?
How have Royal Enfield's sales and revenue been affected recently?
Royal Enfield experienced near-zero sales in April and a 69 percent sales decline in May 2020. Its parent company reported a nearly ₹300 crore revenue decline in the fourth quarter.
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