R L Ravichandran
Royal Enfield put up a smart show at the Auto Expo. CEO RL Ravichandran reveals the gameplan to take the two-wheeler manufacturer to the next level to Sumantra Barooah.
What is the strategy to take brand Royal Enfield to the next level? What role will the new 500 Classic play in it?
The Classic 500 is our flagship brand now. We are pleased with the response to the bike, both in India and abroad. The two variants of the Classic 500 EFI — Chrome and Battle Green — unveiled at the Expo are for the export market and are expected to roll out in Europe and the US this summer. Only then can we look at bringing it to India and only the Chrome model as a limited edition series. Meanwhile, the Unit Construction Engine has thus far replaced 20 percent of our total production. From April 2010, the entire model range will be in the new engine platform.
With another cult brand, Harley-Davidson, having entered India, how do you plan to maintain Royal Enfield’s brand position?
For many people, the two brands may look like as if we are in the same territory but the bikes are all about a cult, about exclusive fan following, and each bike has got its own character. I’ve been looking forward to companies like Harley coming here because India is still not a country for freewheel cruising. You may have to cruise leisurely. So, the difference between Royal Enfield and any other bike is, firstly, ours is not for racing at all. It’s for leisure cruising. And, more than anything else, our bikes have got certain character and stature which are very unique only to Royal Enfield. Cult brands like Royal Enfield, Harley-Davidson, Triumph or Moto Guzzi have been around for a long time. We are the only brand that’s exported from India to all of Europe, US, Australia and Japan and we’ve been co-existing as good, healthy brands for many years. I don’t think Harley-Davidson’s coming here alters the situation in any way.
Why have you rolled out the Café Racer concept?
The Café Racer is actually our halo bike. Royal Enfield or brands like BSA or Norton have worked on the café racer concept but actually it is for those consumers who had no option but to modify their bikes for a racy stance, a slightly upswept silencer and very low weight. The café racer got its name from bikers who used to race between one café to another at night. Our model brings in the romance of café racing into today’s world. For a product like ours, be it the Classic or a new model, our technology may be new but the styling is unique to Royal Enfield. The Café Racer will be a new model with new components, new petrol tank, fender, frame and console. Even the engine might become a well tweaked motor. I am not too worried about the numbers it will sell in. It will bring a halo to the entire brand platform.
When do you plan to launch it in India?
Our commitment to the world market is for 2012, which means we should be launching it at a motor show in 2011. The India launch will happen after a 12-month gap.
Royal Enfield withstood the downturn last year, thanks to its brand equity. What growth rate are you targeting this year?
We did our corporate planning three years ago and took a clear and bold decision on the company strategy, on ensuring what will make us very unique. As long we stick to the classic styling and as long as our engines reverberate with the character of Royal Enfield, we are only going to expand. We are very clear in our DNA and we have set a target — a minimum growth rate of 15 percent per annum. And, given the good response to the new engine and new styling, I think we will grow more than that over the next couple of years.
Do you expect exports to grow faster now that you have launched some international models?
Definitely. We have to raise the percentage of exports, both for revenue as well as for numbers. They may be only about six or seven percent now due to certain production constraints. But the minimum acceptable level for us will be 10 percent but we are looking at 20-25 percent in the next two to three years, in terms of volume.
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