From near extinction to motorcycle royalty, Royal Enfield’s journey is a testament to resilience and innovation. Uncover the thrilling story of how Eicher Motors breathed new life into this legendary brand, capturing the hearts of riders across India and the world!
A Classic Beginning
Royal Enfield’s story began in 1851 when George Townsend began making sewing needles. By 1881, the company expanded into bicycle components, but it was only in 1901, that Royal Enfield debuted in the world of motorcycling. In the next fifty years, it built a legendary reputation, and a lot of credit for that goes to its iconic Bullet, launched in 1932, which became the longest-living motorcycle design in history.
Royal Enfield’s journey started in India when Madras Motors placed an order for 500 Bullets in 1952. As its popularity increased, it became essential for manufacturing in India. In 1955, a partnership with Madras Motors led to the birth of Enfield India. By 1957, the company was producing its own components, and by 1962, the Indian Royal Enfield Bullet was entirely manufactured in India.
While Royal Enfield thrived in India, it struggled in the UK. The arrival of Japanese companies made motorcycles cheaper, more reliable, and faster. By 1970, all UK manufacturing of Royal Enfield had ceased. But the Indian market was booming, and in a complete turn of events, Enfield India started exporting back to the UK in 1977!
A New Era with Eicher Motors
After navigating management changes and production challenges, Royal Enfield found new life when Eicher acquired a 26% stake in Enfield India Ltd. By 1993, Eicher held a majority stake, officially transforming Royal Enfield into an Indian company, ready to reclaim its legacy.
In 1994, after Eicher Motors acquired Royal Enfield, the losses started outpacing the bikes. Sales were sluggish—about 2,000 units a month—compared to a production capacity of 6,000, and the bike was plagued with reliability issues. Despite its fan following it was unable to generate profits. So, in 2000, Vikram Lal, the then CEO of Eicher Motors, decided to shut down the Royal Enfield brand which would mean depriving us of our experiences of life riding an RE. But his son Siddhartha Lal, had other plans and asked for two years to turn the company around. He was appointed as the CEO of Royal Enfield in 2000. From 2000 to 2004, he operated from the brand’s Chennai headquarters, implementing cost-cutting measures and spearheading crucial product upgrades. His vision aimed to reignite the spirit of Royal Enfield and reclaim its legacy.
Decision Crossroads
In 2006, Siddhartha faced a pivotal choice: continue juggling mediocrity across multiple business lines or excel in a few. He boldly chose the latter, zeroing in on the motorcycle and truck divisions. This shift allowed Royal Enfield to concentrate on its core offerings, but significant challenges remained, particularly outdated technology and reliability issues that undermined its aspirational image.
Siddhartha Lal and his team aimed to modernize Royal Enfield bikes while preserving their rugged aesthetics. They decided to shift the gear from right to left, a decision sparking resistance from loyal fans. The old cast iron engine, plagued by leaks and emissions, was replaced with a lightweight aluminium engine, solving these problems while maintaining the beloved thud-thud vibration at 70% of the original’s amplitude. Through innovation, they sought to revive Royal Enfield’s legacy for a new generation of riders.
On The Rise
It was only in 2010 that the balance tipped in Eicher's favour. Eicher introduced the Royal Enfield Classic. It masterfully blended the appearance and feel of previous generations with modern technology and a better gearbox. Upon launch, it became an instant sensation achieving 100% capacity utilisation, leading to a 6-8 months waiting period, necessitating tripling of production capacity to 1.5 lakh units.
In that same year, Eicher Motors sold 50,000 bikes. By 2012, the number doubled to 1.1 lakhs and by 2014, annual sales skyrocketed to 3,00,000- an impressive sixfold increase! The excitement continued with the launch of Continental GT; a café racer bike designed to challenge the brand's rugged image. Following that the 'Himalayan' - an adventure touring motorcycle was launched offering riders the ultimate off-roading experience. Today RE boasts a portfolio of 11 models, including Classic 350 and Bullet 350 each embodying the brand’s spirit and legacy. Also very recently, Royal Enfield has decided to go on the EV route, launching a sub-brand, Flying Flea, which will focus only on light weight motorcycles which RE calls an urban plus riding range.
Celebrating New Heights
For the quarter ending June 2024, Eicher Motors reported impressive total revenue of ₹4,231 crore, marking an 8.49% increase from ₹3,901 crore in the same quarter of FY 2023-24. On July 26, Eicher's shares soared past the ₹5,000 mark for the first time, reaching a new all-time high of ₹5,058.90. The stock’s remarkable rise has created more Crorepatis in India than the famous quiz show "Kaun Banega Crorepati."
Royal Enfield remains a leader in the premium motorcycle market, although its market share has declined to 88.3% in FY24 from 96.3% in FY19, as competition heats up from rivals like Hero MotoCorp and Bajaj Auto, who have also ventured into the premium segment. In FY24, Royal Enfield sold 912,732 motorcycles—9% more than the previous year—with over 77,000 units sold in export markets, showcasing its enduring appeal and growth potential.
With Eicher’s strategic guidance, Royal Enfield has transformed into a beloved motorcycle brand, blending tradition with innovation.
Author: Armaanveer Singh and Simranjeet Singh
Illustration: Soham
Sources
Business Today
FinancialExpress
Forbes
Finology Insider
News18
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