Grupo Simpa Invest $150 Million to Double Motorcycle Production And Export

Grupo Simpa, local distributor and assembler of the Royal Enfield motorcycle brand, among several others, invested $150 million to double the capacity of the assembly line it had installed in 2020 and began exporting units to Uruguay and Paraguay, in addition to supplying the Internal market. The expansion of the line will allow the assembly of up to 20,000 units per year.

In an interview Martín Schwartz, director of Grupo Simpa, and Krishnan Ramaswamy, president and leader of the American Continent of Royal Enfield -who traveled to Argentina to visit the plant-, spoke about the company’s plans and prospects of the motorcycle market by 2022.

“The brand has been very well received by the Argentine client and the idea is to expand the business. We want to increase capacity to continue growing,” said Ramaswamy, an Indian executive who manages the brand throughout the Americas. Royal Enfield -of British origin- is owned by the Indian group Eicher Motors.

The investment of $150 million in the Simpa plant -which was entirely paid for by the local group- will allow the assembly line to be duplicated and to start exporting, Schwartz pointed out. “We have an agreement with Royal Enfield to export 250 units to Paraguay and Uruguay in the first year. We already started doing it,” he said.

The growth plan also contemplates an increase in the number of dealers, which will go from the current 12 to 20 by the end of the year, he detailed.

The group plans to manufacture 7,000 units of the four Royal Enfield models that it currently assembles, through the system known as IKD, which adds local integration to the parts that are imported for assembly. The local integration of the models today is around 10.5%, with wiring and metal parts of national manufacture, Schwartz said.

Simpa began assembling Royal Enfield models in September 2020 at its Campana plant, which then became the first factory outside of India to assemble Royal Enfield bikes. With the announcement of the expansion, the assembly line was moved to the other plant that the group has in the Pilar Industrial Park.

Royal Enfield models compete in the mid-range of the market in terms of displacement, from 350 to 600 cc, with prices between US$4,700 and US$10,000. The Argentine market is concentrated in the low displacement segment, up to 150 cc, which represents 80% of unit sales.

The director of Grupo Simpa pointed out that the general motorcycle market can grow between 20% and 25% this year compared to 2021 and reach between 380,000 and 400,000 units, according to his projections. “The most important variable will be the dollars available to the government to allow us to import. We are optimistic that we will grow above the market. With Royal Enfield we want to double what we sold last year and go from 3,500 to between 6,500 and 7,000 units. To that we must add the 250 export units”, he stated.

In addition to Royal Enfield, Simpa’s motorcycle division is representative of the KTM, Husqvarna Motorcycles, Vespa, Can-Am, CF-Moto, Piaggio, Aprilia, Moto Guzzi, Ninebot-Segway and Super SOCO brands.

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Grupo Simpa Invest $150 Million to Double Motorcycle Production And Export - /10

Summary

Grupo Simpa, local distributor and assembler of the Royal Enfield motorcycle brand, among several others, invested $150 million to double the capacity of the assembly line it had installed in 2020 and began exporting units to Uruguay and Paraguay, in addition to supplying the Internal market. The expansion of the line will allow the assembly of up to 20,000 units per year.

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