As competition intensifies in the midsize motorcycle market in India, iconic player Royal Enfield is readying to launch the Continental GT 650 and Interceptor 650 even as it delves deep into its World War II roots in the form of the recently launched Pegasus. Rudratej Singh, president, Royal Enfield, speaks to Nilesh Wadhwa on the road ahead.
Royal Enfield will soon be entering the premium 650cc segment. How do you see it panning out?
We do not look at segments on the basis of cubic capacity or premium. Our segmentation is different, and not the classical segmentation that industry uses. For us, it is about building the classical Royal Enfield heritage for the people who buy into the idea. For instance, in the US, there was a need to make sure that people who are buying into the idea of a Royal Enfield that they see Royal Enfield the way our character is and relevant to customers in the North American market. It is not about a decision of 650cc vs 750cc, it is about saying that our product and design have been authentic to our Royal Enfield character association. It is not about creating a product in a premium segment, but building a product for people who believe in our idea to choose our products and deliver on the promise. That’s one background on why we went up in our product decision.
The other is that we are bringing back the parallel-twin which is deeply rooted in our history; it is a revival of our history, and of making it relevant and contemporary. It was about making sure that when we do something it should be authentic and accessible, we are not here to capture or snatch market share. We are here to expand our market and create a segment of our own. There is no middleweight segment in India other than Royal Enfield, I think the global middleweight segment is also very small, we want to expand this segment. We are not here to compete in the premium segment or capacity segment.
When you talk about expanding the middleweight segment where RE has a strong presence, there are new entrants who are either planning or have already entered. How do you plan to sustain your position?
The only way to protect one’s share is to grow, to expand. Every manufacturer or brand will try to do the same thing from their point of view, we don’t have to focus on them but focus on our point of view and our consumers. If we do our job every day better, that will give us more dividend than looking at what others are doing. Overall, if there is more competitive heat as we say, it can only be good for the consumers. Usually, whatever is good for the consumer is good for the business as well.
The 650cc Interceptor INT and Continental GT showcased at EICMA, Milan on November 7, 2017
Any timeline for introducing the Continental GT 650 and Interceptor 650?
We are working on the final stages of the parallel-twins on the Interceptor and Continental GT. After that, we will also be building capacities, because we do not want to be in a situation where we have good order books but we don’t have deliveries. We are in the final stages of development and building additional capacities.
How many additional showrooms do you plan to set up in FY2019?
Right now we have around 829 in India and have a similar number of multi-brand/exclusive stores in the world (mostly multi-brand outlets). We have expanded our footprint and in just one year, in India, we added close to about 140 stores compared to the same time last year.
We are going to drive accessibility, we are going where required. But the strategy is to make sure that we are available not just for sales but for services, spares and rides as well. One big part which is hidden is that when you buy a motorcycle, we don’t necessarily follow the queue of when will the customer come to us for the ‘first service’. We follow up on when will you go for the first ride with us, when we get the infrastructure ready than only we open up a dealership. And at the moment I think we are well represented in India. As mentioned we have earmarked Rs 800 crore as capital expenditure for this financial year.
Are you planning to come out with more vintage stores similar to the one started in Chennai?
Yes, in a few more cities. This is a part of our accessibility market development program. There are many people who love Royal Enfield but are not buying a product from the company (under Royal Enfield). This is a plan to make it more accessible, you will find more stores in this fiscal. We will experiment with different types of Tiers (Tier 1, Tier 2) to see how they operate.
Many people have complained that while Royal Enfield has been strong in marketing, but has lagged behind in engineering. How do you respond to this?
I don’t agree with that. I think contrary to the statement, we have been poor marketers. We are good at market development, we don’t have a terminology brand manager in the company for instance, our brand managers are our customers, community, we just facilitate from the inside, and all our brand managers are outside.
I think some of the best minds in product development, industrial design and R&D in the world. If you look at our UK Tech Centre and Chennai Tech Centre, we have close to 100 staff at the UK Technology Centre; two years ago, we had around 9 or 10 people. In Chennai we have got amazing talent, all of the new products that you will see will be the efforts of this talented team.
Many of the RE products have drawn criticism for technical or mechanical breakdowns. How do you see this situation?
You follow the automotive industry and know at the end of the day the products are machines. In a typical product development cycle, our current engineering improves technical glitches in market products. That’s the case for all manufacturers across all manufacturing industries. We are not very different from that.
I do believe that our legacy of what we are still sometimes being associated with, sometimes also plays a role. In the last 10 years, sequential with every subsequent product launch be it the Unit Construction (UC) engine or more recently the launch of the Himalayan series, we are constantly improving. I would not give you an answer that we are perfect, but also I don’t feel that anybody is. In manufacturing, it takes 10 cycles after launch after that you constantly improve the platform, and that’s what every manufacturer does.
Do you plan to hike prices any time soon?
Pricing is the last decision we make. We are a business but we do not want to make money out on just pricing decisions. But, yes, we do take price corrections wherever required.
(L-R) Mark Wells, head, Global Product Strategy and Industrial Design, Royal Enfield; Rudratej Singh, president, Royal Enfield and Shaji Koshy, head, India Business, Royal Enfield at the launch of Classic 500 Pegasus.
What is the thought behind bringing back the Pegasus?
It is a story-telling, I believe all motorcycles are different irrespective of the models or the sub-brand, each of them tells a story. As a story, about pure motorcycling, it is an aspect of self-discovery, adventure, self-expression. It could be a Himalayan, a Classic, a Continental GT, each of them giving a different expression. The Pegasus is introducing a lot of people who we believe don’t naturally know how deep our roots are in terms of our pedigree, our legacy and our associations. We ourselves came to know a lot many new things that we can share. The Pegasus is a story about association with the armed forces. This one in particular shares the story of World War 2’s flying fleet and its role in the war.
Also read: Siddhartha Lal: 'From day one, the 650 twins have the highest spec required anywhere in the world.'
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