Luckily for Royal Enfield’s Indian parent Eicher Motors, the company enjoyed a bumper profit in the first quarter of its current fiscal year to the end of June. Q1 earnings reportedly surged by more than 20% year-on-year to just over £100m. Overall quarterly revenue from operations, which also include truck and bus assembly, grew by in excess of 10% to almost £400m. In both cases, analyst estimates were under-estimated. Strong domestic sales of higher-margin motorcycle models, such as the Himalayan 450 and Interceptor 650, were largely held responsible.
However, towards the end of Q2 in September, Eicher was obliged to announce a global recall affecting motorcycles it had manufactured between November 2022 and March 2023. This followed emergence of a defect involving rear and side reflectors fitted to some of these machines, potentially scuppering their visibility in low-light conditions.
While the company claims that the issue has only been identified in a small number of manufactured units, the exact figure remains undisclosed. But it acknowledges that rider safety could be at risk if reflectors fail to function properly and has therefore opted for a widespread recall and replacement.
Royal Enfield is planning for dealerships to carry out replacements, obviously at no cost to motorcycle owners, in phases. Besides Indian home turf, the programme will start in South Korea before expanding to other international markets, including the US, Canada, Latin America, Europe and the UK. While cost per replacement item and fitment time of about 15 minutes will be trivial, the exercise in its entirety is bound to be expensive.
Rupee-Sterling currency translation at forex rates applicable on 3 October