Siddhartha Lal believes Royal Enfield’s new plant coming up in Oragadam near Chennai next year will “once and forever” change the company.
“We are taking this new plant as an opportunity to upgrade ourselves to absolute global standards in terms of manufacturing excellence,” the Managing Director & CEO of Eicher Motors, which has Royal Enfield in its kitty, told Business Line.
The Oragadam facility will operate in tandem with the existing plant in Tiruvottiyur for motorcycle assembly next year. This activity will, thereafter, be confined to the new unit while engines will still be machined and assembled in the old plant. “Initially in 2013, we will do a combined 150,000 units, while Oragadam can do twice as much on its own subsequently,” Lal says.
Particular emphasis has been paid to the back-end where suppliers have been upgraded to meet the exacting conditions for the new plant.
Lal says training has also begun for workmen, systems, processes, and new employees as part of this drive. “We are taking this transition very seriously. Royal Enfield has to change when it gets to the new plant. This facility is just not for capacity,” he says.
Hence, whether it is the in-built systems and processes or the wholly new paint shop (which, Lal reiterates, is global plus and even better than anything else most other bike makers are using in India and international markets), Royal Enfield is pulling out all stops.
On the supplier side, care is being taken to ensure that critical parts are brought to even higher standards “than what we are used to in terms of accuracies”. The company follows a business model where it outsources most parts but does the engine, design and development, painting and bike assembly in-house.
The other welcome news is that Royal Enfield is now in the preferred employer space. “The perception of the brand in the market has changed dramatically where passionate riders are now keen to work for us,” Lal says. In addition, plans are on to increase the diversity of employees. There are a lot more women working in general functions because Royal Enfield is no longer considered a hardcore engineering company but more as a leisure motorcycling brand.
Lal’s next step is to target markets beyond India. He shrugs off the ongoing crisis in Europe saying the company’s exposure to this part of the world is “extremely small”. Over the next decade, Royal Enfield sees developing markets as the bigger play, a list that includes Latin America, Southeast Asia, Africa and West Asia.