In 2018 when Anand Mahindra, Chairman, Mahindra Group, Anupam Thareja, Founder of Phi Capital, and Boman Irani of Rustomjee Group, came together to resurrect the iconic Czech motorcycle brand, Jawa, everyone believed that the formidable trio will rewrite a new chapter in a segment in which Royal Enfield was the clear leader.
After all, Anand brought to the table the Mahindra group’s entire automobile ecosystem, including manufacturing, at its Pithampur plant in Madhya Pradesh. Thareja was widely known as the turnaround expert — he was involved in reviving Royal Enfield — and Irani understood the value of the brand because it was his father who had actually introduced Jawa to India many decades earlier. Together, they formed a company called Classic Legends in which Mahindra took a 60 per cent stake and the balance was split between Thareja and Irani.
The euphoria around Jawa’s relaunch was so high that the company got overwhelmed by the initial rush of buyers. “We got 1,00,000 bookings when we launched the Jawa compared to our planned production of 30,000 in the first year because we were not sure if we could sell 10,000 units initially. We were supposed to start deliveries six months after we took the bookings but it got delayed,” says Thareja in a conversation with businessline.
A Rocky start
The delay in delivering the bikes dampened the company’s prospects in a market where consumers had so many other options. The troubles for Thareja and his team got further exacerbated with supply chain snags, and a few months later everything came to a standstill after the Covid pandemic hit the roll-out plans. “We were being hit by curve balls one after the other. We had tremendous learning during that phase. But at no point did we have any doubts about what we wanted to do with Classic Legends (CL),” says Thareja.
Thareja, who is responsible for CL’s long term strategy, was perhaps lucky to have Mahindra as the largest investor. Mahindra had had its share of troubles when it launched the Scorpio in 2002. “I must have aged 10 years in that one year because of the problems we faced. Many people wrote us off. The board wrote me off. They said if this does not pick up then this guy is out. We would have given up a long time ago if the product was wrong and nobody wanted the product,” Anand Mahindra told businessline.
Mahindra’s belief is beginning to pay off for CL. The company now has a portfolio of four Jawa and three Yezdi models. Since launch, there are about two lakh CL bikes on the road. In February this year, the e launched its high-end 650 cc bike under the BSA brand in the UK. This was followed by Germany, France, Italy and Austria. “Our ambition is to become an Indian global bike company. All our bikes are made in India,” Thareja says proudly.
To achieve the next phase of growth, CL is investing ₹1,000 crore over the next three years to ramp up marketing, distribution and new product development. The target is to grow monthly sales from the current 4,000-5,000 units to 10,000 by next year. Of this, 20 per cent will come from exports. While these targets are still nowhere near Royal Enfield’s current sales of over 77,500 units a month, Thareja has his blueprint ready to carve out a niche for CL.
In India, the focus will be to consolidate the existing portfolio of four Jawa and three Yezdi models. The company has 440 sales touch-points spread between 223 dealers. The company will expand its presence to 500 touch points soon and to 750 by the end of next year. In the international market, CL will roll out BSA in Europe, the UK, USA and Japan. Jawa will be rolled out in China, Poland, Argentina, and Africa. CL is also ready with its first electric bike which will be launched in the UK first. CL has earmarked ₹200 crore for the rollout of its electric bike which Thareja believes will “blow your mind away”.
the success formula
But can CL ride on nostalgia and break the perception that only the older generation values classic brands? “We are not riding on nostalgia, we are making sure that while the design is classical, we are using the latest technology in our products. There is a market for classic brands. It is also not true that only the older generation appreciates our products, in fact a significant part of the our buyers are youngsters,” counters Thareja.
CL has learnt from its mistakes. For example, the company has made a conscious decision not to take bookings after the initial debacle with Jawa. Now, the bikes are launched only when the product is available with dealers. CL is also cultivating the rider community by forming clubs. It has 63 clubs across the country with 40,000 members.
The emergence of new technologies such as AI has also cut down the lead time from concept to actual production. The company is also using analytics to map the customer’s journey from the time they see a bike to where he bought it. On the development side, CL is using virtual reality to visualise product design. But the biggest advantage CL has is the backing of the Mahindra group’s manufacturing and supply chain ecosystem. “We would have been foolish to enter the motorbike market if we did not have Mahindra’s ecosystem. If we did not have this supply chain and manufacturing support then we would have had to invest close to ₹2,500 crore,” says Thareja. With this backing, Jawa and Yezdi should be able to step on the gas.