Royal Enfield: Selling lifestyle more than bikes, since 1901

26 Nov 2021  Read 11672 Views

“ I just saw it, and I fell in love with it. That motorcycle became my real companion.” - Siddhartha Lal.

In the 1990s, a teenage boy came home to a gleaming red chrome Royal Enfield and was immediately smitten by the view. A decade later, he inherited the dying empire of the same Royal Enfield. 

He had two choices: either sell it off for pieces or save his family’s honor by reviving it.

Today’s is the story of Siddhartha Lal and a passed-on legacy, The Royal Enfield. 

Royal Enfield bikes have been sold in India since 1949. And man! Indians really have had a special place for it since its induction. Ever wondered why? 

I did! I would watch my brother talking about it, absolutely spellbound, his excitement, evident of the dopamine hitting.  There had to be something different about this brand to have touched the hearts of a million people.

Much to my wonder, my brother told me that the actual ‘Indian Royal Enfield’ story started after the British firm named ‘Royal Enfield’ went under in 1971. And that its Indian manufacturing unit in Madras (now Chennai) bought the rights to the name and continued to produce the Bullet. 

Ah, The Bullet! Would you be shocked if I tell you that The Classic Bullet 350 was first built in Great Britain in 1932 and is still in production?

That was just the tip of the iceberg. In its post-British history, RE did pretty well, and sales snowballed. Indian police officers even used Royal Enfield bikes as a sort of unofficial-official bike. But RE soon had a midlife crisis, and our hero, Siddhartha Lal came to its rescue. 

The beginning of the end

In Siddhartha Lal’s own words, his love affair with Royal Enfield started when he was just 17 and came home from boarding school to a gleaming chrome red Royal Enfield motorcycle parked in the garage. “ I just saw it, and I fell in love with it.” 

Source: Deccan Herald

Little did he know that in just ten years, he would have to fight the world to keep his lover alive.

But to understand the present, you need to visit its dark past.

 

  • Vikram Lal joined the family business, Eicher Motors, in 1966.

  • Eicher Motors acquired a majority stake in Royal Enfield in 1993. 

  • Vikram Lal stepped down from his chairman position in 1997. 

  • Soon his son, Siddhartha Lal, held the reins and became the CEO in the year 2000. 

Close call

In 2000, Royal Enfield’s factory had a production capacity of 6000 bikes, but it was producing only 2000. There were no questions apropos the fanbase of these vintage bikes. 

But, the engines used in these bikes were technologically outdated, and there were problems with the gears, which added up to circumstances where Senior Lal said they would probably have to sell off RE

 "It was not because of its (the board of directors) confidence in me, but because the business was doing so badly it could hardly get any worse,” Siddhartha said later.

Speaking of bankruptcy, you should read how Jio bankrupted its peers. 

Lal dissected RE and realized it needed a long tiring surgery. 

The first part to be operated on was the gears, the engine, and then moving on to fix the snapping of accelerators, clutch cables, electrical failures, and oil leakages. Damn, that was a long list!

But before that, he faced another difficult decision. Lal didn’t want to excel in 100 different businesses (actually 15); he wanted to be the ‘different one’ in just 2.

Shaking things up a bit

There were 15 different businesses in which Eicher motors had invested in, like garments, making shoes, export of food production. Lal felt they didn’t really need to be in those bleeding businesses. He did a little portfolio rationalization and disinvested in 13 of them to save Royal Enfield.

The managers wanted to modernize the outdated models to appeal to a broader customer base but at the risk of losing its existing ones who loved their bikes just the way it was. 

There was a cult of vintage lovers on one side, and on the other, tech-savvy young millennials. 

The choice was difficult and a decision awaited. 

The team naturally decided that the individuality of the bikes could not be compromised at any cost!

Enter Siddhartha. 

Siddhartha was 27 when he was entrusted with the responsibilities of reviving a dying company.

When he first started at the company, he spent months on the roads, riding and chatting with people, day and night, not asking them about the specifications they liked about the bike or asking for suggestions. He tried to emotionally connect with the customers to understand the feeling, the mindset, the priorities

Soon, he could see the gaps and put a pin on the problems that were bleeding RE dry.

Something went wrong: Troubleshoot your RE.

The gears:

The vintage look that the petrol tank and headlamp provided could not possibly be altered for anything. So moving on to the things that could be altered- 

There was this great dilemma: should the gears be shifted to the rider’s left foot or retained on the right side itself? 

You might ask, ‘ left-right-left karna hi kyu hai?’ To answer that, the new models that were coming into the market had their gears on the left. And consumers, devoid of any RE experience, were used to their left foot on the gears. The aim was to make the switch easy and the learning curve shallower. 

As with any change at first, there was opposition for shifting the gears to the left by its buttoned-down fans, but the company went ahead and did it anyway.

The thud-thud Engine:

Another most loved characteristic of a Royal Enfield bike is its engine’s rhythmic vibrations and beat. To fit in a new engine with a modern aluminum body would fix the problems of oil leaks and seize up. But in doing so, the much-adored vibrations would have to be compromised.

After A LOT of testing, they could retain 70 percent of the engine’s thud-thud. Cause, vo Enfield hi kya jo thud-thud na kare?

Imagine you had a RE model before this. Can you imagine the price you would get for that actual vintage bike?

 

In 2005, Lal brought in Ravichandran, as CEO of the group for its revival process.  Ravichandran had earlier worked in TVS, Suzuki, and Bajaj Auto before joining RE. So, he brought his much-needed experience to the rejuvenation process.

"We retained many of the old engine's characteristics - the long stroke, the single-cylinder, the high capacity with pushrod mechanism," says Ravichandran.

Lal, in an interview, said, “It’s not about putting tech for the sake of tech. It is about putting tech for better rideability, for better enjoyability of the motorcycle.” 

Ravichandran and Lal’s collective effort came to fruition, and by 2008, it was evident through the numbers that the revival process worked. Warranty claims fell sharply, and dealers reported lower workloads.

As of now, Royal Enfield has sold more bikes in India than Harley Davidson has sold worldwide. How cool is that!

Being different, being human 

Aren’t companies supposed to provide either the best service or the cheapest? Royal Enfield does none but has the largest market share of any cruiser motorcycle. It is absolutely fascinating how Siddhartha still talks about Royal Enfield as if it were his child, well, brainchild for sure!

It did not try to sell the product. It sold the emotion of owning a Royal Enfield bike.  But shouldn’t the real question be how Royal Enfield survived an entire century with such a price model and with such outdated technology, and at the same time retaining a crazy fanbase? 

Well, to answer your (technically my) question, if you sell a product, you need to constantly improve it and price it well to compete with competitors. RE recognized this and instantly focussed on building it as a lifestyle brand, a point-of-view brand that sold emotions.

While most companies aim at increasing the volume of their sales, Royal Enfield ensured each of their sales was a delight to their customers, which continued building a broader client base. 

According to Lal, the company now operates on a philosophy that “Production will always follow sales as far as Royal Enfield is concerned.” He even went as far as to say, “It’s not that we produce X number of bikes and we figure out a way of selling them.”. 

And rightly so, currently, Royal Enfield has approximately 10 million riding enthusiasts globally. I mean, who wouldn’t want to own this beauty?

Drippin’ In Finesse

Currently, in Royal Enfield, the new product development and introduction process roughly takes three and a half years to materialize from its concept to production. It is followed by a 1000 point checklist quality check done by people from Japan to take care of the quality coming down the line. 

Royal Enfield is probably the only company with the world’s most loyal customers who would wait for 5 to 8 months (sometimes more) for their bike delivery. With the production capacity increased now, this number has come down to 1.5 to 2 months. 

Moving on, is it just me, or do you also think that the RE showrooms are extra lavish? Do you know there is an interesting story behind it too?

Royal Enfield Showrooms selling the ‘Royal Enfield Experience'

Lal recalls having an ‘Aha’ moment when a group of bikers passed by a Royal Enfield store. The first gorgeous new store with Royal Enfield flags and bright lights.  They zipped by, stopped, circled back to the store, and to their disbelief, couldn’t believe it was an RE store. 

 They came in, and they were chatting and looked at the store, and they were like, “This is Royal Enfield? We didn’t know this was Royal Enfield.” Lal asked them if they had not heard about the bikes before, to which they replied, “ We didn’t know THIS was Royal Enfield.”

Their complete perception of RE changed when they saw the store and talked to people. They believed RE was something their rural uncle rode, and it was definitely not for them. And after their little store tour, it was for them and for every bike-lover out there.

That is when Lal realized the importance of selling the experience and decided to put up gorgeous stores everywhere they could.

 

“Made like a gun,” the century-old Bullet ricochets off a person’s dream and into a reality on the roads. This is not any typical Sooryavansham-rags-to-riches story. It is all about what it takes to bring back a person to life from his deathbed.

Source: amazon.in

While disinvesting in 13 of its businesses to save Royal Enfield, Lal said, “In my mind, the basic question was this: do we want to be a mediocre player in 15 small businesses or just be good in one or two businesses,".

The moral of the story? In 2010, Eicher Motors sold 50,000 bikes in a year. 

And in just 4 years, by 2014, the number multiplied 6 times and rose to 3 lakhs in a year! 

Naturally, their share prices skyrocketed in these years. In 20 years, Eicher Motors' stock has grown nearly 2555 times.  

Justly, being different in a world where everyone is running the herd-race outsold mediocrity.

 

About the Author: Rishika Mukherjee | 13 Post(s)

Rishika is an MBA aspirant. She is an avid reader and loves to write as much as read. As Hazel Grace stated, she could read a good author's grocery list and so would Mukherjee. 

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