Can Harley Davidson X440 and Triumph Speed 400 end Royal Enfield's dominance in premium category?

Unlike the earlier threat from Jawa and Yezdi, this time Royal Enfield faces greater odds in its fight to retain market share against new entrants Hero-Harley Davidson and Bajaj-Triumph
The X440 is the first model from the Harley Davidson-Hero Motocorp combination
The X440 is the first model from the Harley Davidson-Hero Motocorp combination

This week can arguably be called the most disruptive in the history of Indian premium motorcycle industry. It has seen the launch of not one, but two major new players -- the Hero-Harley Davidson combination with its X440, and the Bajaj Auto-Triumph Motorcycle joint venture with its Speed 400 and Scrambler 400X models.

The launches threaten the near monopoly enjoyed by Eicher Motors' Royal Enfield, which is estimated to have a market share of over 80% in premium motorcycles in India.

Both the X440 from Hero-Harley Davidson, and the two models from Bajaj-Triumph have impressed experts, who are expecting a strong challenge to Royal Enfield from these models.

"We believe that X440 is a strong competitor to current market leader in premium segment and has potential to clock in good volumes," said Himanshu Singh, an auto stocks analyst at Prabhudas Lilladher broking firm.

While the X440 from Harley Davidson-Hero combine is widely seen as commanding greater brand value, it is the pricing of Speed 400 and Scrambler 400X from Bajaj-Triumph that has really caught everyone unawares.

"While HD440X pricing took us by surprise, that of the Triumph 400cc came in as a bigger surprise, given that it comes with superior features like a liquid-cooled engine, upside-down forks, ride-by-wire, torque assist clutch, etc," said Aniket Mhatre, a research analyst at HDFC Securities. 

Indeed, analysts at Sharekhan -- another broking firm -- also agreed that the new models from Bajaj Auto and Triump have the potential to attract "a new set of aspirational customers".

"Bajaj Auto and Triumph have launched their co-produced Triumphs at a competitive price point..offering an aspirational brand at an affordable price point," they noted.

Indeed, the X440 is the most affordable Harley-Davidson bike, with an ex-showroom price starting at Rs 2.29 lakh, only slightly higher than Royal Enfield's Classic Chrome 350cc.

Similarly, Triumph Speed 400 is priced at Rs 2.33 lakh initially, with a discount of Rs 10,000 available for the first 10,000 customers.

However, industry observers feel these are likely to be in the nature of teaser prices, as pointed out by Aniket Mhatre of HDFC Securities. "What leaves us confused," he pointed out, "is the fact that while pricing is aggressive, both players seem to have very limited capacity to start with.

"We hence believe that this is likely to be introductory pricing and unlikely to be sustainable in the long run for the features/brands on offer."

In fact, Mhatre is so worried about the impact of these launches that he has reduced his estimate for the stock price of Royal Enfied's parent company, Eicher Motors, to 3,086 from the earlier target of 3,715. The stock has already fallen by more than Rs 400 from the 3,630 rupees it was being traded at before the models were unveiled.

Specifications comparison of Harley Davidson X440, Triumph Speed and other models (Source | Prabhudas Lilladher)
Specifications comparison of Harley Davidson X440, Triumph Speed and other models (Source | Prabhudas Lilladher)

HARLEY DAVIDSON X440

The Harley Davidson X440 is co-developed by Hero MotoCorp and Harley Davidson at the Hero Center for Innovation and Technology (CIT) with help from Hero's Germany Tech Center and Harley Davidson’s Milwaukee Technology Center.

"We test drove the Harley Davidson X440 and found it to be quite impressive," said Himanshu Singh of Prabhudhas Lilladher. "The bike attains 100+ kmph speed with ease and minimal vibrations. It should be suitable for city as well as long rides.

"We believe that X440 is a strong competitor to current market leader in premium segment and has potential to clock in good volumes," he added.

Analysts at Nirmal Bang securities were also impressed by the positive feedback generated by the new Harley Davidson model. "According to the riders of X440, the bike’s behavior at low speeds is light & easy and it’s a low-effort bike to ride," they pointed out.

"X440 has high stability. The braking performance is also quite low effort. The seating position is very comfortable. The throttle response is crisp; gear ratios are well spread out and it picks up seamlessly - and potently - from low rpm," they added.

TRIUMPH SPEED 400 / SCRAMBLER 400X

The Triumph Speed 400 and Scrambler 400X are powered by 398.15 cc, liquid-cooled, four-valve, singlecylinder engines.

The bikes carry features like upside down forks, rear mono-shock, disc brakes on both wheels with dual-channel ABS, all-LED lighting, traction control, semi-digital instrument cluster, and alloy wheels wrapped inside tubeless tyres.

The 400 cc Triumph motorcycles would be manufactured in India and in few of the export markets.

The bike can be assembled at Triumph’s plants at Thailand and Brazil.

Speed 400 is expected to be positioned as the entry-level roadster model. Scrambler 400X is expected to be positioned as the scrambler model.

Brand

Bajaj Auto

Hero Motocorp

Royal enfield

Model

Triumph speed

Harley X 440

Himalayan

Engine CC

398.15

440

411

Price range Rs lakh

2.23

2.29-2.69

2.15-2.28

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