Royal Enfield Maker Eicher Motors Establishes Dutch Unit, Eyes EU Warehouse Post-Brexit

26 Mar 2024 , 02:18 PM

Eicher Motors Ltd., the manufacturer of Royal Enfield motorcycles, has established a subsidiary in the Netherlands and is contemplating a warehouse in the EU following Brexit, which has complicated the transportation of parts to mainland Europe.

The formation of the Dutch arm aims to reduce reliance on the UK, and discussions are underway to establish a warehouse, potentially in Germany or France, to facilitate the supply of non-motorcycle products such as spare parts and branded merchandise.

Arun Gopal, Royal Enfield's international head, cited Brexit challenges in material transportation between the UK and Europe and emphasized the need for a more strategically located warehouse to serve the region efficiently.

Originally founded in the UK in the early 20th century and renowned for its motorcycles used in both World Wars, Royal Enfield imports bikes and parts from India to Europe and distributes them through local channels.

With a burgeoning business in the EU, the new warehouse is expected to significantly reduce lead times from the current 90 days to just two weeks, according to Gopal.

The company plans to commence operations with a single warehouse for non-motorcycle products and is in discussions with logistics specialists in the EU to manage its inventory.

Although Germany and France are potential locations for the hub, no final decision has been made regarding the warehouse's precise location, Gopal mentioned.

Eicher Motors has infused €500,000 ($541,000) into the newly formed entity, Royal Enfield Europe BV, and intends to inject additional share capital in the future, as per a stock exchange statement released on March 22.

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