The bullet has rediscovered its speed as Indians take to biking for pleasure. Sales of premium bikes have risen quickly and the iconic Royal Enfield is riding on this trend. Overwhelmed by an increasing demand, the Chennai-based company has discontinued bookings for its fast-selling Classic 350 model.Royal Enfield plans to double its capacity to one lakh units by 2013. The exporter of 500 cc motorbikes to international markets including, Europe and the US, is also looking to increase exports to countries in Latin America, Africa and the Middle East, besides strengthening its presence in Europe and the US. It also expects overseas sales to more than double over the next five years.
The Eicher Group company is all set to shift entire production to a new engine platform to make products compliant to stricter Bharat Stage III emission norms. Last month, the bike maker introduced its new Bullet model, 'Electra Twinspark 350' as a part of its strategy to modernise its range of motorcycles fitted with unit-constructed engines.
As the custodian of a legendary brand, Siddharth Lal, MD of Eicher Motors, is determined to take the legacy forward. In an interview with ET, Lal steers clear of any comparisons with Japanese brands and discusses the attributes that make Royal Enfield click with the Indian consumers. Excerpts:
It’s the world’s oldest motorcycle still in production. How do you plan to keep the brand young and appealing to the consumers?
It’s a concerted effort and does not happen overnight. Our brand is the oldest motorcycle in production. After we took over the company, we thought about what it should mean to the people. They thought we were related to the Army. But that is not the truth. While we do sell 3% of our bikes to them, it’s still a very small part of what we do. We then decided to position it as a leisure and practical brand.
It is not everything for everyone unlike some of the mass-market brands. It’s quite desirable for certain demography of people. Our target consumer is difficult to define. But anyone who has an interest in motorcycling is our target consumer. In terms of demographics, the people who have kept us alive are the hardcore bullet lovers, the ones who have bought the bike through thick and thin. They are our fair and foul weather friends.
Who are your new buyers?
Affluent Indians are our new consumers. It’s this segment of urban, working professionals that has really powered bike sales. A large number of them are coming up from industries such as IT, banking, pharma and FMCG. Now, people earn more money and have greater disposable income. They want to make a statement and enjoy the ride. So, our bike is a perfect fit for them. We have targeted this growing set of consumers with our classic series of motorcycles. We sell maximum numbers in Ludhiana. In our traditional markets of Punjab and Kerala, we have consumers who really like the feel and sound of the bike and are real loyalists.
From the good old days of Yeh bullet meri jaan to almost no advertising at all. What’s the brand marketing strategy?
We do not do any product endorsements. We go far from what some of the Indo-Japanese brands do. We believe in reality. We hate that way of advertising. We would not like to put a model on a bike when he does not really enjoy riding. That is untrue to our brand. We have a tiny brand spend, so we focus on just a few publications for our advertising.
What we really believe in and want to do on a regular basis is rides. Instead of putting money in advertising, this is what helps us connect with consumers better. So we have the Himalayan Odyssey, the Southern odyssey, Rajasthan, Rann of Kutch rides. These are merely the national rides that we organise. Tucked away under this are several other regional initiatives.
How this is done is that we invite applicants for rides. People bring their own bikes and pay for their own fuel, accommodation et al. We do the entire organisation bit. We also take people from the media with us. So, that is part of our spends. We have also focused on upgrading our dealerships. Until sometime back, our dealerships were very rudimentary.
We then changed the entire look and feel of the dealerships and the attitude of our salespeople. It has worked wonders, especially with the youth. When you are selling a consumer good and a leisure brand, it’s all about the retail experience that you provide to the consumers. We have our website www.royalenfield.com that has a large and lively community of bikers. Consumers are asking questions, getting answers and even criticizing the bike, which is good as we get some honest feedback.
The cheapest Royal Enfield bike costs more than Rs 1 lakh. Are you planning cheaper models to cater to a wider segment?
Absolutely not. Our idea is to appeal to a wider audience but in an aspirational way. People will find a way to buy things that hold aspirational value. Our idea is to continue in the practical leisure motorcycle segment. We need to ensure that we are supplying to the demand that is there, which is a problem at present.
And I do not see any potential for us going into lower displacement bikes. There is a long way to go for us with the existing lineup. We have now grown to 5,000 bikes a month. But because of increased visibility, there is more demand, which needs to be met effectively.
A lot of international bike brands are planning India ride. How do you see competition taking shape? Would you look at introducing bigger bikes to beat the competition?
Big bikes from us are a possibility, but not now. Our absolute focus now is to get our 350s and 500s in order. I do not see any competition from international superbike brands because they are selling bikes that are much more expensive than ours. Also, those bikes might not ideally suit Indian terrain. We have a different consumer segment.
We do not do any product endorsements. We go far from what some of the Indo-Japanese brands do. We believe in reality. We hate that way of advertising. We would not like to put a model on a bike when he does not really enjoy riding. That is untrue to our brand. We have a tiny brand spend, so we focus on just a few publications for our advertising.
What we really believe in and want to do on a regular basis is rides. Instead of putting money in advertising, this is what helps us connect with consumers better. So we have the Himalayan Odyssey, the Southern odyssey, Rajasthan, Rann of Kutch rides. These are merely the national rides that we organise. Tucked away under this are several other regional initiatives.
How this is done is that we invite applicants for rides. People bring their own bikes and pay for their own fuel, accommodation et al. We do the entire organisation bit. We also take people from the media with us. So, that is part of our spends. We have also focused on upgrading our dealerships. Until sometime back, our dealerships were very rudimentary.
We then changed the entire look and feel of the dealerships and the attitude of our salespeople. It has worked wonders, especially with the youth. When you are selling a consumer good and a leisure brand, it’s all about the retail experience that you provide to the consumers. We have our website www.royalenfield.com that has a large and lively community of bikers. Consumers are asking questions, getting answers and even criticizing the bike, which is good as we get some honest feedback.
The cheapest Royal Enfield bike costs more than Rs 1 lakh. Are you planning cheaper models to cater to a wider segment?
Absolutely not. Our idea is to appeal to a wider audience but in an aspirational way. People will find a way to buy things that hold aspirational value. Our idea is to continue in the practical leisure motorcycle segment. We need to ensure that we are supplying to the demand that is there, which is a problem at present.
And I do not see any potential for us going into lower displacement bikes. There is a long way to go for us with the existing lineup. We have now grown to 5,000 bikes a month. But because of increased visibility, there is more demand, which needs to be met effectively.
A lot of international bike brands are planning India ride. How do you see competition taking shape? Would you look at introducing bigger bikes to beat the competition?
Big bikes from us are a possibility, but not now. Our absolute focus now is to get our 350s and 500s in order. I do not see any competition from international superbike brands because they are selling bikes that are much more expensive than ours. Also, those bikes might not ideally suit Indian terrain. We have a different consumer segment.
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