Royal Enfield – Brand Rejuvenation of Motorcycle in India The year 2000 could have been decisive. That was when the board of directors at Eicher Motors decided to either shut down or sell off Royal Enfield - the company's Chennai-based motorcycle division, which manufactured the iconic Bullet motorbikes. For all its reputation, the sales of the bike was down to 2,000 units a month against the plant's installed capacity of 6,000; losses had been mounting for years. Just one person stood up to the board, insisting Royal Enfield should get another chance. He was Siddhartha Lal, a third generation member of the Delhi-based Lal family, promoters of the Eicher group of companies. Lal, then 26, was an unabashed Bullet fan: he even rode a red coloured Bullet while leading the baraat (procession) to his wedding venue, instead of the traditional horse. "The board agreed to give me a chance," says Lal. "It was not because of its confidence in me, but because the business was doing so badly it could hardly get any worse." Lal felt Royal Enfield could still be saved. The bike had its reputation, a cult following, an instantly recognisable build, and aspirational value. Changes had to be made to keep up with the times and make the bike more acceptable, and there in lay the problem. Royal Enfield fans liked the bikes exactly the way they had always been. "We needed changes to attract new customers but by doing so risked losing existing ones," says R.L. Ravichandran, whom Lal brought in as CEO in 2005 as part of his revival effort. Ravichandran had earlier worked with both TVS Motor and Bajaj Auto. "We were in a peculiar situation," he adds. Rejuvenating Times The change had to be a calibrated one. The mistaken notions of prospective customers had to be addressed, and any reservations about Bullet and Thunderbird, which was launched in 2002, removed. At the same time, Lal and Ravichandran were clear that the individuality of Royal Enfield bikes should not be compromised. "We did not want to go down the commuter route, but instead looked at the leisure segment," says Ravichandran. Retaining the bikes' rugged looks was a given, including the build, the design of the head lamp and the petrol tank. But should the gears be shifted close to the rider's left foot - as in most bikes - or retained on the right side? The question gave Lal and his team many sleepless nights, since long time users were dead opposed to the change. The engine was another thorny question. The old cast iron engine was a relic of the past. Its separate gear box and oil sump design made it prone to oil leaks and it seized up very often. Its ability to meet increasingly strict emission norms was also suspect. A modern aluminium engine would eliminate these problems, but it would lack the old engine's pronounced vibrations and beat - which Royal Enfield customers loved. Laws of physics made it impossible to replicate these with the new engine. The new engine had 30 per cent fewer parts and produced 30 per cent more power than the old, with better fuel efficiency. By 2010, all Royal Enfield models had begun to use the new engine. Two other problems needed to be addressed: the quality of some of the components Royal Enfield bikes were using, and the sales experience. The case is prepared by Prof. Sanjay Patro and Aby Abraham, XLRI Jamshedpur for academic purpose only. It is not to illustrate either effective or ineffective handling of a business situation
To tackle the first, shop floor process were fine e ses e-tuned, whil suppliers w exhorte to le were ed improve qua ality levels. R Royal Enfield also embar d rked on a larg scale inter exercise to tone ge rnal e up performa ance. "We de eclared 2006 as the year o getting bac to the bas of ck sics," says Ravichandra "We also formed a fie quality ra an. eld apid action fo to bridg the gap bet orce ge tween customer expectations an the reality nd y."
Slowly, the tide turned. E t Engine relate problems and oil...