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Royal Enfield working on new model; targets 100 per cent growth in five years

27-August-2005
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Royal Enfield working on new model; targets 100 per cent growth in five years

Royal Enfield, the 103-year old iconic superstar on the two-wheel highway, is planning to expand the niche set of enthusiasts who swear by the Bullet. Changing and adapting to suit the needs of the ‘Young Adult’ segment is what the brand is hoping to do, without losing its iconic identity. A tough ask, given that the brand is 50 years old in India.

A ‘show and sell’ approach, brand stores, and new models are expected to help the company achieve its target of 100 per cent growth in the next five years, and 25 per cent over the previous year.

Speaking to reporters, R L Ravichandran, CEO, Royal Enfield, said, “The Bullet will not be an old bike which looks new, but a new bike with an old school charm. By the end of the next financial year, we also hope to launch a new vehicle to attract the modern day young adult, with the characteristics and charm of the Enfield Bullet.”

In a manifestation of its efforts to change without losing its identity, the company is working on this new bike, which would have better fuel efficiency, and which would be offered at a more affordable price point.

The company’s R&D Team is working with design experts to put this new bike from the Enfield stable on the roads by 2007. The new bike is expected to be lighter by 15 kg (the present mean machines weigh approximately 175 kg!). The new offering will be in the 350 cc (and above) category as Enfield is not keen to enter the mass market.

While the company’s marketing spends would remain nominal by industry standards at Rs 5 crore, with minimal spend on media in the category, a three-pronged strategy for increasing its numbers has been drawn up.

Brand Stores, coming up in Chennai, Jaipur, Mumbai and Hyderabad, will provide a new-look retail experience for those curious enough to want an experience of the bikes. Retailers were picking up the cue, too, according to the company.

In addition, the brand is trying to help customers get over their skepticism over ride and maintenance with a big bike by allowing them to spend time with the bike for up to even a week.

Gone are the days of test rides, weeks of test live-ins with the machines are in! The recently re-launched Electra and Thunder Bird variants with left side gearshifts are other steps to help ‘commuters’ migrate to the ‘big biking’ experience.

S Vaitheeswaran, Director - Sales and Marketing, said, “We have been playing with an ‘English Classic’ kind of bike. The Bullet will remain a vintage and classic brand offering true motorcycling experience, but will change with new technology and offerings. There are evidences to suggest that the ‘adult youth’ are willing to experiment with high power bikes.”

The total number of Bullets sold last year was 32,000, and this figure pales in comparison to sales performance of offerings in the commuter segment. But then, Bullet’s operational break even is at just 28,000 bikes, and it is a niche offering positioned clearly above the other offerings.

Of the total sales, at present 8 per cent are from exports, and another 8-10 per cent come from institutional sales, that includes the police and defence establishments.

“We can comfortably predict sales of 5,000 bikes per month in five years’ time. At present, it is around 2,500 bikes a month. We are not in the ‘volumes’ game,” asserted Vaitheeswaran.

The company is also working on a new engine platform, and the first such ‘integrated’ engine is expected be on the Thunder Bird in the next six months. Next on the engine front would be a 500 cc integrated engine for the export model that delivers the power sought in international markets. It recently launched its ‘lean burn’ engine with the objective of optimising fuel efficiency.

Enfield is currently delivering an order from the Sri Lankan Air Force, and enquiries from African and SAARC countries are being pursued. The company exports its bikes to over 25 countries, including the US, UK and Japan. And the list, for this inimitable ‘thunder wonder’ on Indian roads, is growing.

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