‘En­field has man­aged to be both as­pi­ra­tional and ac­ces­si­ble’

EICHEr Mo­tors-Con­trollED RoyAl En­fiElD HAs rEG­Is­tErED A stEl­lAr GrowtH oF ArounD 18% In OC­to­BEr tHIs yEAr.

The Sunday Guardian - - & Comment Analysis - PANAJI/NEW DELHI

In­dia’s iconic mo­tor­cy­cle man­u­fac­turer Royal En­field un­veiled its two new en­trants—In­ter­cep­tor INT 650 and the Con­ti­nen­tal GT 650—at Va­ga­tor, Goa, on 19 Novem­ber. The show­cas­ing of the brand’s first twin-cylin­der en­gine bikes dur­ing the 14th edi­tion of its an­nual mo­tor­cy­cle ex­trav­a­ganza, Ri­der­ma­nia, came weeks after they were show­cased at Eicma 2017 mo­tor show in Mi­lan, ear­lier this month.

Speak­ing about the com­pany’s as­pi­ra­tions with the new ad­di­tions in its dis­tinct mus­cu­lar and pli­ant lineup of mo­tor­cy­cles, Ru­dratej (Rudy) Singh, pres­i­dent at Royal En­field, told this cor­re­spon­dent, “We don’t just deal in bikes, we deal in bik­ing. The rid­ers and the un­matched RE com­mu­nity are at the heart of our brand and with th­ese new bikes we aim to give them a su­perla­tive mo­tor­cy­cling ex­pe­ri­ence.”

Eicher Mo­tors-con­trolled Royal En­field has reg­is­tered a stel­lar growth of around 18% in Oc­to­ber this year. In­ter­est­ingly, En­field’s sales have soared up over 16-fold in the past one decade.

While Royal En­field has been a mar­ket dar­ling ever since the launch of Royal En­field Clas­sic—in­spired by 1950 model Bul­let—in 2009, back in 2000 the com­pany was on the verge of bank­ruptcy with its Chen­nai-based plant pro­duc­ing merely 2,000 units against the in­stalled ca­pac­ity of 6000. Royal En­field was one of the many causal­i­ties of lib­er­al­i­sa­tion. With the mar­ket flooded with the Indo-Ja­panese newage mo­tor­cy­cles, the trade­mark thrum of its leg­endary cast-iron en­gine failed to at­tract new cus­tomers. Amidst the con­stant com­plaints about the en­gine seizures, snap­ping of the ac­cel­er­a­tor, reg­u­lar break­downs of the parts, and oil leak­ages, the com­pany was con­sid­er­ing to sell off its Chen­nai di­vi­sion.

“At one point we weren’t do­ing well. In fact we were go­ing slower than our com­peti­tors in the in­dus­try. There were fi­nan­cial prob­lems too. But Royal En­field had a de­voted fol­low­ing. And we need to put in our en­er­gies to take that ahead,” Sid­dharth Lal, Managing Director and CEO, Eicher Mo­tors, told The Sun­day Guardian.

The com­pany made a dra- matic turn­around in 2004 with a se­ries of de­ci­sions that not only rein­vig­o­rated the ail­ing Royal En­field but also shot up the com­pany’s shares by 64,146 % be­tween 2000 and now.

“We be­lieve that peo­ple buy an idea first and then the prod­uct. That idea was there and we needed to take it ahead. For the last 15 years or so what we have done is to im­prove our prod­ucts and en­hance the over­all mo­tor­cy­cling ex­pe­ri­ence. We man­aged to walk the tight rope of be­ing as­pi­ra­tional and ac­ces­si­ble at the same time. That has set us apart,” Singh noted.

One of the tip­ping points, as Lal re­calls, was sell­ing 13 out of 15 business Eicher groups and fo­cus­ing on only two busi­nesses –trucks and Royal En­field.

“Con­ven­tional wis­dom says don’t dis­turb the ap­ple cart. While that is cor­rect, I had a slightly dif­fer­ent view. We should work on one or two busi­nesses and be a leader than be medi­ocre in sev­eral busi­nesses,” re­called Lal.

Apart from sell­ing 13 busi­nesses, the com­pany also took a chal­leng­ing de­ci­sion of re­vamp­ing its mo­tor­cy­cles with­out com­pro­mis­ing on its trade­mark look. While the head­lamps and the trunk re­mained un­touched in or­der to re­tain the bike’s trade­mark rugged look, the vin­tage ca­st­iron en­gine was re­placed with more re­fined unit con­struc­tion en­gines (UCE). The gear-shift­ing was also moved from right-hand side to the left-hand side.

“Ev­ery­one loved cast-iron en­gine but it needed to be re­tired and up­graded. We launched Clas­sic 350 with new UCE en­gine which was com­par­a­tively more re­li­able. And it re­ceived an over­whelm­ing re­sponse,” said Lal. Eicher re­vamped all the Royal En­field re­tail stores in 2015 and in­tro­duced a com­plete range of branded ap­parel, au­then­tic mo­tor­cy­cling ac­ces­sories, and rid­ing gear. As a re­sult, the com­pany’s ap­parel and ac­ces­sories business alone has grown around 300% over the years.

“We have al­ways stood for ex­pe­ri­ence over the sales of prod­ucts. We want to be ac­ces­si­ble to the youth with­out the pres­sure of buy­ing the mo­tor­cy­cle. We want to cre­ate that kind of en­vi­ron­ment where you en­ter the world of Royal En­field and hope­fully walk­out with a bet­ter view of us,” noted Lal.

The bike-maker’s con­stant ef­forts in en­gag­ing with its rid­ers through var­i­ous mo­tor­cy­cle ex­trav­a­gan­zas— Ri­der­ma­nia and Hi­malayan Odyssey— have also pro­pelled the com­pany’s growth in the past one decade.

“We have de­fined our ob­jec­tives of delighting cus­tomers on three im­por­tant mo­ments, in search, in store, and in use. We want to en­gage with them. Our mantra is sim­ple, get nonusers to ride, get own­ers to ride more and get deep en­thu­si­asts to mo­ti­vate oth­ers to en­gage with the Royal En­field com­mu­nity,” said Singh while elab­o­rat­ing on the brand’s fun­da­men­tal prin­ci­ple of pro­vid­ing pure mo­tor­cy­cling.

Singh fur­ther added, “Our rid­ers and com­mu­nity are at the heart of our brand, and that they are the true cus­to­di­ans of our brand’s pur­pose of pure mo­tor­cy­cling. Rider Ma­nia is the world’s largest gath­er­ing of Royal En­field en­thu­si­asts and it is a cel­e­bra­tion of mo­tor­cy­cling as a way of life.” With the re­cent launch of 650 twins and two state-of-theart fa­cil­i­ties com­mis­sioned near Chen­nai grow­ing at a rate of over eight lakh units an­nu­ally, Royal En­field now as­pires to script a “new chap­ter in global mo­tor­cy­cling”.

“From 2010 to around 2013 we were try­ing to man­age the growth that we had seen in the pre­vi­ous cou­ple of years. We had to add new ca­pac­i­ties of peo­ple, ser­vice base, prod­uct de­liv­ery, and man­u­fac­tur­ing to man­age the grow­ing de­mands. Around 2014 on­wards we started to em­bark on our new plans to go from op­por­tunis­tic sales to strate­gic sales out­side of In­dia,” said Lal.

Talk­ing about how the ideas of Con­ti­nen­tal GT 650 and In­ter­cep­tor INT 650 were con­ceived, Lal re­vealed, “With 650 twins we are go­ing through Phase 2 in In­dia, where we are giv­ing a step-up up­grade to our ex­ist­ing rid­ers, and en­ter­ing into Phase 1 in in­ter­na­tional mar­kets.”

The 650 twins—Con­ti­nen­tal GT, an up­graded ver­sion of its cafe racer DNA, and In­ter­cep­tor INT, that ush­ers in the idea of the 1960’s fun, re­laxed mo­tor­cy­cle ex­pe­ri­ence—will be launched in all 40 coun­tries that the brand is present in, in­clud­ing In­done­sia, Thai­land, Vietnam, Philip­pines, Brazil, and Columbia.

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