Royal Enfield finding its way in the US
British company is 2 years older than Harley
It’s the “other” motorcycle company in Milwaukee, that didn’t just celebrate its 115th anniversary but is older than Harley-Davidson Inc.
Royal Enfield, based in India but with its North American headquarters in Milwaukee’s Historic Third Ward, now has nearly 90 dealerships in the U.S. and Canada — up from zero when the company landed here three years ago.
Former Harley executive Rod Copes led the effort to establish Royal Enfield in North America, starting with bikes that captured the essence of oldschool motorcycling — a throbbing engine, simple electronics and a low price — and this year adding models that are a little bigger, more powerful and have anti-lock brakes.
Royal Enfield produced its first motorcycles in Britain in 1901, two years before William S. Harley and Arthur Davidson built their first bikes for the public in Milwaukee.
But while Royal Enfield company is popular in India, one of the world’s largest markets for two-wheel vehicles, it’s barely had a presence in the U.S., where Harley dominates heavyweight motorcycle sales.
Copes, now president of Royal Enfield North America, established a dealership in Milwaukee in 2015 and has since brought the brand to dealerships in 34 states and Puerto Rico.
“We spent about the first three years setting up the business, getting the systems, processes in place. Now, we are running the business, which is a lot more fun,” Copes said.
“We’ve got the momentum going,”
he added.
This year, Royal Enfield expects to manufacture about 950,000 motorcycles, more than three times what Harley will ship to its dealerships around the world.
But about 95 percent of Royal Enfield’s sales are in India — a big difference between it and Harley.
That’s why the company hired Copes to get the North American business started, practically from scratch.
“The beauty of it is we have the oldest motorcycle company in the world, and we are kind of resurrecting that brand,” he said.
“The first step was getting the infrastructure in place, then new products. Now we can turn the dial up and really start selling.”
Royal Enfield has opened new factories in India and a product development center in the United Kingdom.
Copes says the company has reached a point where, financially, it now has the legs to pursue markets outside of India.
Still, even if Royal Enfield invaded the U.S. like the Beatles did in 1964, Copes says he doesn’t see the company being a competitive threat to HarleyDavidson.
That’s because Royal Enfield has focused on midsize motorcycles rather than big touring bikes and cruisers like Harley makes.
The power and speed of a Royal Enfield doesn’t match a high-performance Honda, Kawasaki or a Harley Softail.
Instead, the bikes are better suited for city streets, two-lane highways and dirt roads, where it’s more about enjoying the ride than breaking the speed limit.
This spring, Royal Enfield introduced an “adventure touring” bike suited for off-road use as well as commuting to work.
The Himalayan joined a field of adventure tourers from Ducati, BMW, KTM, Triumph, Suzuki and other motorcycle manufacturers. Harley is coming out with one in 2020.
But the Himalayan is one of the least expensive adventure touring bikes, even if it’s a little rough around the edges.
“With an MSRP of $4,499, corners were cut when it came to fit and finish. … That being said, Royal Enfield deserves credit for including a slew of extras along with that base price,” motorcycle journalist Spurgeon Dunbar wrote in a review for Common Tread magazine.
“The Royal Enfield is approachable and affordable. And that alone might be enough to nudge a few more people into the world of adventure riding,” Dunbar said.
Industry stuck in low gear
Royal Enfield has made its sales debut in the U.S. as the motorcycle industry has been stuck in low gear.
U.S. sales, including all manufacturers, peaked in 2007 at 1.1 million bikes, according to the Motorcycle Industry Council, and have since fallen to 538,000 in 2017.
Harley-Davidson, the world’s largest maker of heavyweight bikes, has seen its U.S. sales growth stumble for a variety of reasons, including fewer young people getting into riding.
“I would say, right now, we are romancing growth, courting growth. We aren’t growing, so this is dating,” Harley CEO Matt Levatich said at a recent event sponsored by the business group Scale Up Milwaukee.
“There are a lot of people wondering what’s going on at Harley. Our U.S. numbers are not growing … the industry, of which we are a significant portion, is not growing,” Levatich said.
Harley and Royal Enfield, alike in some ways but very different in others, have focused on product development and attracting new riders to overcome the motorcycle market malaise.
Harley says it’s partnering with an Asian manufacturer, not yet named, to build smaller bikes that will be sold in India.
Some have speculated that Royal Enfield would be a suitable partner for the world’s largest manufacturer of heavyweight motorcycles.
The two century-old brands face similar challenges balancing tradition with innovation.
“I am constantly reminding everybody that legacy isn’t actually the road you’ve traveled; it’s the road we’re on,” Levatich said.
Royal Enfield says it has a quiver of motorcycles in development, and that it’s launching two all-new 650cc models in January.
One of the company’s first bikes in the U.S., the 500cc Classic, now has some modern touches such as antilock brakes and an improved ride.
“But it still has the character of the old motorcycles (from the 1960s). We can’t get that out unless we completely redesign it,” Copes said.
Executive came from Harley
Levatich and Copes rose through the executive ranks at Harley-Davidson at about the same time.
Levatich joined the company in 1994, through its leadership development program, while Copes started in 1993.
Levatich held numerous roles including president of MV Agusta, an Italian motorcycle company that Harley owned less than two years.
He was Harley’s president and chief operating officer for six years before being named president and CEO in May 2015.
Copes was at Harley for nearly 20 years, in various roles including director of investor relations, vice president of the Pilgrim Road operations, and senior vice president of global sales and customer service.
He ran Harley’s Asia-Pacific division and helped establish the company’s presence in India, where he became familiar with Royal Enfield.
Copes left Harley in 2012.
Now he has only about 20 people working for him, running Royal Enfield’s North American operations, but he gets considerable support from the parent company in India.
Copes says Royal Enfield’s success will be in the middleweight bike category with bikes selling from about $4,500 to $6,000.
“We are the only motorcycle company focused solely on the middleweight segment, and we believe this space is severely under-served,” he said.
Royal Enfield is still a novelty for most folks here. Pull into a gas station on one of the bikes and heads turn, followed by lots of questions.
That, Copes said, isn’t all bad. “We have a very small marketing budget,” he said. “Our best advertising is more of our motorcycles on the road.”