As of writing this blog, Royal Enfield is one of the top motorbike manufacturers in the world, but that wasn’t always the case. Back in 2004, barely into Siddhartha Lal’s tenure as the COO of Eicher motors (The company that manufactures Royal Enfield motorbikes), he took a decision that astounded the market experts by divesting 13 off the 15 businesses that Eicher had stakes in. Lal’s logic was strong and he asked a vital question to the other company heads, “Do we want to be a mediocre player in 15 small businesses or just be good in one or two?” The Eicher board of executives couldn’t find any flaws in his logic and after an intense portfolio analysis, the only businesses left with Eicher were their bike (Royal Enfield) and truck manufacturing businesses.
He believed in clearing the clutter and focusing on the businesses that he knew had potential to become promising. Lal decided to take on and take their motorcycle business to the next level first and he was off.
“I did the mathematics, projections and all we needed was to get our motorcycle business to the next level (in terms of sales).” He said. Royal Enfield had always been Lal’s favorite business out of all the other businesses that he inherited when he joined Eicher motors. His interest in improving the quality of the bikes the company manufactured and his dedication towards working hard to fulfill his vision for the future greatly increased the value of the Eicher motors shares. To put it bluntly, the Eicher motors shot up from Rs. 224 in 2006 to 26,735 in 2018.
The road to the rise of Royal Enfield wasn’t easy though, in 2005, the company sold about 25,000 bikes every year. Looking at these numbers Siddhartha Lal knew that with some effort and planning, he could turn Royal Enfield into a really profitable business.
He engineered and improved Enfield bikes by riding hundreds of kilometers himself because he knew that if he wanted to turn the company into something the customers were passionate about, he’d have to turn the company into a place where everyone involved were just as passionate about the manufacturing as his customers were, he achieved this by initiating a motorcycling culture in the team. Under Lal, the quality improved and with it, the sales grew as well. By 2010, the company was selling 50,000 bikes over three platforms. Following this, Lal decided to build all Enfield bikes on a single platform and the first bike launched from this new, single platform was the Enfield Classic, which caught the fancy of customers and and sales shot up six times in the following half a decade from 50K units in 2010 to 300,000 units in 2014 and 450,000 units in 2015.
“By becoming smaller, we have become bigger.” Lal said in 2015. And he was right, Royal Enfield has grown exponentially under his watchful eye. Now he continues to work in improving the number of Enfield bikes exported to foreign countries with the help of a stellar team of experienced and qualified business executives from the US and the UK. Lal found his inspiration from companies like Porsche and Mini who have created their own place in the market and in the hearts of their customers by creating an ingenuity and legacy that can only be created by passion and love for the original DNA of their products.
“Royal Enfield is not bought for pure acceleration nor for fuel efficiency, but it has a stature and legacy. There are no bells and whistles associated with it, but there is purity and purpose built into it.” says former CEO Ravichandran and I couldn’t have put it in better words. The Enfield motorbikes have truly become a signature for a a robust, unstoppable and empowering motorcycling experience and the fact that it has been able to create such a strong image of itself in the hearts of it’s customers without offering any conventional tweaks and upgrades still leaves me feeling awed. And I don’t know who else to thank than the man who made it happen, Siddhartha Lal.
In August 2015, Royal Enfield Motors announced it is establishing its North American headquarters and a dealership in Milwaukee, Wisconsin, with the intention to offer three bikes, the Bullet 500, Classic 500 and Continental GT 535 Cafe Racer as they feel this engine size represents an under-served market. The dealership will be Royal Enfield’s first company-owned store in the U.S., according to Rod Copes, president of Royal Enfield North America. The company wants to establish about 100 dealerships in American cities starting with Milwaukee.
Cover Image Source : Motoroids