Royal Enfield, one of the biggest manufacturers of premium motorcycles in India, today refuted reports that the company could face an increase in input costs if it does not source an electrical component from a Delhi-based autoparts maker.
The Mint newspaper carried a report today claiming that most motorcycle makers source the electrical rectifier — an adaptor that converts AC current into DC current — from a Delhi-based firm, but Royal Enfield was planning to buy it from elsewhere. This, said the report, would increase the price of Royal Enfield’s motorcycles and affect the rollout of its BS-VI models.
Rectifiers cost anywhere from Rs 150-350, and are available from spare parts shops. A rectifier for Bullet Classic made by SWISS, for example, is available online for Rs 345.
Besides SWISS, other autoparts makers, including Minda and Varroc, also manufacture and sell rectifiers in India.
The Mint report said Eicher Motors, which makes Royal Enfield bikes, may have to import the component from outside India if it does not buy it from Delhi-based Flash Electronics. ” This might significantly increase the cost and hurt the company’s ability to establish itself in developed markets such as the US and Europe,” the report said.
However, Royal Enfield said the company has a multi-vendor policy for sourcing components, and ‘regulator rectifier units are no exception’.
It also said rectifiers are not very expensive.
“The cost of this component constitutes a negligible proportion of the overall cost of a motorcycle and any change in source of this component will not cause any discernible change in the overall price of the relevant motorcycles.”
It also said the company is fully prepared to roll out new models in time for meeting BS VI emission control standards that come into effect on April 1.
Royal Enfield called the Mint article “erroneous and mis-guiding” and “not a true representation of facts and speculative”.
Royal Enfield is facing tough competition from Mahindra & Mahindra-owned Jawa Motorcycles, which started delivering its bikes earlier this month.
RE bikes start at around Rs 1.25 lakh, while Jawa bikes start at around Rs 1.7 lakh.
