You don’t own the Bullet — the Bullet owns you, sometimes even before it belongs to you,” states Akash Ahuja. A die-hard Bullet loyalist, Ahuja has been the proud owner of a 1983 Bullet 350cc since he turned 18. “From the first time you see it or hear its unique thump, the Bullet casts its spell on you for life.” Ahuja, now 27, first felt the magic when his dad brought home a 1973 standard 350cc Bullet. He was in Class 10. He would get to wash the bike on alternate days but he was hooked for life. Bullet owners across the country have similar tales to tell. It’s this unequivocal loyalty that has kept Royal Enfield, India’s oldest motorcycle company and maker of the Bullet, rolling strongly over what has sometimes been a bumpy ride.
Royal Enfield’s faithful band of followers are scattered all over the world. The brand is present across 40 countries, including the US, UK, Germany, Italy, Japan and Australia. Popular Mechanics, the leading American auto and tech magazine, ranked two of its models (the Classic Chrome and the Bullet 500) among its 10 top picks at the progressive international motorcycle show in New York in January 2011. Jay Leno, the acerbic talk show host and an avid car and motorbike collector, added a Bullet Electra Deluxe to his collection in May 2011.
In fact, exports form around 6% of overall revenues. In the countries where it is present, Royal Enfield ties up with a single distributor, who in turn ties up with smaller dealers for sales and after sales service. “Our customers in developed markets are avid collectors who want to own a piece of history — a true British Classic,” says Venki Padmanabhan, CEO, Royal Enfield. “They are happy to own a bike that comes with vintage styling, is reliable, and at a reasonable price.” The fact that the British Classic is now hand-crafted in Chennai only adds to its old-world charm. Royal Enfield had started exporting the Bullet worldwide from Chennai in 1984.
Tripping down memory lane
It all began in Redditch, a small town in Britain, where the world’s first motorbike was made in 1901. The iconic Bullet was launched in 1932 in Britain and found its way to India in 1949. One of its earliest customers was the Indian Army which found the bike ideal for the poor roads and the rough terrain servicemen had to encounter during border patrol. While the company started supplying to the Army in 1953, its earliest customers would define how the brand would be perceived for years to come.
The widely referred text on brand management, ‘Strategic Brand Management-Indian Version’ by Kevin Lane Keller (professor of marketing at the Tuck School of Business, Dartmouth College), MG Parameswaran (executive director and CEO, Draftfcb+Ulka) and Issac Jacob, points out that the Bullet has always been perceived as a brand where the rider is a strong man in authority — the father, the police man, the army officer, or even the tough guy down the street — making the Bullet a truly aspirational brand.
While it did enjoy the respect and the stature of being the man among the boys, the ride was about to get bumpy for Enfield. First its UK operations shut shop in 1970. The production line was then moved to Chennai. Royal Enfield remained on a good wicket in India till the early 1980s, when Japanese bikes stormed the Indian market. Not many indigenous bike manufacturers survived the onslaught and Royal Enfield found itself on the brink by the late 80s.
The launch of the Bullet 500 in 1983, even though it went on to become one of the company’s most coveted brands later, didn’t help its cause all that much as the Japanese bikes took over the market. Many of its counterparts such as Yezdi and Rajdoot went out of business due to competition. Though the company got another lease of life when Eicher Motors acquired it in 1994, losses continued to mount. So much so that Eicher Motors contemplated pulling the plug on Royal Enfield or selling it in early 2000.
“The strong brand loyalty that the Bullet enjoyed was not translating into sales for the company,” says V Sunil, creative director, Wieden+Kennedy, the agency that handles campaigns for Royal Enfield. The company was struggling to sell even 2,000 bikes a month against an installed capacity of 7,000 bikes. Much of it had to do with product complaints — there were engine seizures, oil leakages, a kick start that wasn’t very kind to the knees, and a gear lever that was on the wrong side. So, while a loyal but small group of Bullet lovers stuck by the brand, new customers were apprehensive about the high maintenance fuel guzzler.
It was then that Siddhartha Lal, CEO and MD, Eicher Motors — and a Bullet lover himself — decided it was time to revamp the Bullet without letting go of its old-world charm. Another important decision was taken. “We decided that we wanted to be more than just a company that makes the Bullet,” says Padmanabhan. “Being a single product company was dangerous because we were drawing a box around ourselves.” Part of that grand plan was the launch of the Thunderbird, India’s first cruiser bike, in 2002. Cruisers are mainly used for long-distance riding. Padmanabhan says, “Revolted purists said we should stick to making Bullets but the launch opened up a new demographic for us.”
The Thunderbird started to attract a new set of customers — young, city-bred professionals who were willing to trade their smaller bikes for the Thunderbird, which was lighter than the Bullet and came with a conventional left-sided gearshift. In 2005, the company launched the Bullet Electra, which came in colours and had an electrical ignition. These changes in its product portfolio saw its customer profile expand. “Earlier, customers were mainly from rural or semi-urban areas because the Bullet was suited for the rugged roads in those
areas but with the changes, the growth started to come entirely from the urban areas so we changed the positioning of the brand
from being a commuter’s bike to a lifestyle brand,” says Wieden+Kennedy’s Sunil.
In 2008, as the urban market was opening up to it, Enfield realised it had to get its act together and come up with a more relevant and reliable product. First on its list was the complete overhaul of its relic cast iron engine, which gave way to a modern aluminium alloy engine that had 30% fewer parts and was 30% more powerful than the older engine. It also offered better fuel efficiency. By 2009, Royal Enfield had launched the Classic, which had the best of both worlds — the benefit of new technology plus the brand’s renowned old world charm. The Classic, modelled after the 1950s’ J2, went on to become one of Royal Enfield’s successful launches. Of the 7,000 bikes that the company sells every month on average, almost 40% is the Classic.
What’s more, the orders are piling up — Enfield already has orders for 70,000 bikes at the start of the year, with waiting periods from six to 10 months. The company’s Tiruvottiyur factory hums with activity — it makes almost 40% more bikes in 2011 than it did in the previous year. The company hopes to bring down the waiting period for its bikes once its new facility at Oragadam, near Chennai, comes on stream in 2013 — capacity will then double from 70,000 to 150,000 bikes.
While it is on an expansion mode, Royal Enfield is clear that it does not want to morph into a giant. “We don’t want to be a mass manufacturer,” says Padmanabhan. “We are very happy being a niche player because that helps us understand our customers better and come up with focused products to suit their needs.”
The transformation at Royal Enfield has no doubt been successful — sales have more than doubled in the past five years. “Royal Enfield has improved the quality and modernised the Bullet without sacrificing its character,” says Hormazd Sorabjee, editor, Autocar India. “I think they have positioned themselves brilliantly and it is a huge marketing success.” But with foreign bikes such as Harley-Davidson, Triumph and BMW setting shop in India, Enfield will have to contend with increasing competition. It does have the benefit of a lower price point.
New launches and an improved Bullet power sales growth
But, “We don’t think we are protected because of our lower prices,” says Padmanabhan. “We believe that it is the value proposition we offer to the customers that matters in the end.” Besides, “Foreign bikes are all about technology and performance,” says Autocar’s Sorabjee. “But none of them have the character of a Bullet.”
The bigger challenge for the company will be to find ways to appeal to changing demographics. “If the objective of Royal Enfield is to stay relevant for the next 15-20 years, then they have to specify their target audience and work on how to get the younger generation interested,” says Raghu Bhat, founder-director, Scarecrow Communications. “Expanding the niche is important because what you are doing currently may not be enough for the future.”
The company is doing just that. Enfield recently unveiled the 500cc Thunderbird which is expected on the Indian roads in late 2012. The launch of the Cafe Racer, a bike which is typically used for short speed trips, will happen in 2013. Meanwhile, as Scarecrow’s Bhat explains, “In a world where brand loyalty is fickle, the moment one person displays such intense loyalty towards a particular product, others automatically get interested.” It’s Akash Ahuja who says it with purposeful finality: “If I ever pull a throttle, it will only be that of a