Enfield puts global building blocks in place

From Siddhartha Lal’s point of view, every single bike manufactured by Royal Enfield both now and in the foreseeable future will have a global appeal to it.

“We do not make different motorcycles for different markets but the same platforms will be used to give us scale. Eventually, we only want to work on a smaller number of platforms,” says the MD & CEO of Eicher Motors, the parent of Royal Enfield.

‘Less is more’ Today, the company has a single engine platform which could perhaps increase to three eventually. “We may only have a few things but intend to do those really well. We are not after everything but believe less is more,” says Lal. The idea is not to run behind every opportunity that crops up but stick to the core business and “expand from this core to grow the market”.

In the process, Enfield is targeting being a sought after global brand instead of being the one to do all the chasing. For instance, if there is a market for 600cc bikes, it may seem a welcome opportunity but the company will still restrict itself to fewer locations while manufacturing out of Chennai.

As Lal explains, it boils down to being one organisation on the manufacturing and sourcing/product side. Functions like distribution, aftermarket and branding could be location-specific though this will be confined to a few regions.

Four-step plan Lal says the company is focusing on four stages of growth across potential markets. The first objective of entering any new country is to become a sizable player in middle-weight bikes. This would typically mean achieving a market share of 25 per cent. The next step is to become the leader in the middle-weight category after which the third goal is to grow the size of that particular market.

“I believe we are at Stage 3 in India. However, in most other markets, we are not even in Stage 1,” says Lal. In India, Enfield is a significant player which has grown the market to 3.15 lakh units of which its own share is three lakh bikes. This is poised to grow even further this calendar which could see numbers nearer the four lakh mark.

Stage 4 means being a significant player (by market share) in the overall market. For instance, Enfield’s share in India’s overall bike segment is less than three per cent, a number that is little to write home about. Yet, it is only inevitable for a niche player focused on the 250cc-750cc space.

“We want to become a sizable player in the motorcycle market but this will take time. Clearly, we have to work really hard to make it happen. It may take a decade to reach these four stages in markets like the US but we are willing to wait,” says Lal.

Working the niche For the moment, Enfield is devoting a lot of time to Colombia where it hopes to learn and grow gradually. Latin America and Southeast Asia are also top priorities while China and Africa are still some years away. India still accounts for a lion’s share of its business. Lal believes there is a growing need across the world for “really nice, evocative” motorcycles, a need that his company is gearing up to meet. The key is not to deliver anything extreme in terms of price, speed and weight but a bike that is simple, fun and middle-weight.

The company’s entire philosophy of pure motorcycling is being non-extreme and accessible, focusing on mid-size bikes. There is no intention of manufacturing pure commuters or extremely heavy bikes. “Basically, it is a self-imposed restriction (250cc-750cc) because globally that is how people see middle-weight motorcycles. That is where we can create an enormous impact,” says Lal.

On previous occasions, he has gone on record to state that the direction of leisure biking across the world is ‘disturbing’, with motorcycles being supersized, ungainly and expensive. Sports bikes, he had said, had gone android, crazy and super-fast with specs like 180 hp, which makes it impossible for anyone to control them. And while some love that, these bikes are so heavy, expensive and yet so delicate that their owners don’t want anyone to come close to them.

Thinking globally From Enfield’s perspective, meeting this global need with its own range of bikes was the biggest challenge. The logical step was to hire some top names and, today, the likes of Rod Copes, an ex-Harley Davidson veteran, will spearhead Enfield’s North American operations.

“We are gaining traction globally and people believe our story is credible and relevant. Today, Enfield has a strong senior team from different cultures and different motorcycle companies,” says Lal. The company is determined to have a strong play in the US, a market which is particularly important for credibility and reputation.

“We are getting a lot of people on the R&D and design side and they will be integrated into part of the global team. It is quite natural to think local when 98 percent of products are sold in the domestic market. We have to change our mindset now,” declares Lal.

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