Royal Enfield has built a fortress, won't be easy for robbers to penetrate, says Siddhartha Lal

Siddhartha Lal, MD of Eicher Motors says Royal Enfield has built a fortress and it won’t be easy for robbers to penetrate it. This hesitant repartee came from Lal on queries from the media about Rajiv Bajaj's comment on how the money lies in the mid-size segment for motorcycles.

During the Triumph launch, Rajiv Bajaj, MD of Bajaj Auto had said that the mid-size motorcycle segment is amongst the most profitable segments to participate in. 

Drawing a parallel to the famous American bank robber Willie Sutton's remark, Bajaj had stated, "When Sutton was asked, why does he keep robbing banks, his reply was - that is where the money is. So, Money is in the Royal Enfield (segment), hence there is no other choice but to rob them (mid-size bike segment).”

Global marque brands Harley Davidson and Triumph Motorcycle entered the fast-growing mid-size motorcycle market in early July along with their local partners Hero MotoCorp and Bajaj Auto respectively.

Lal said, "We don’t worry about rivals, we don’t obsess about competition, unlike our competitors. We obsess about the consumer and We are many steps ahead of our competitors."  

He recalled how Royal Enfield has single-handedly grown the mid-size motorcycle segment from 50,000 units to 1 million units, and the company is well prepared with its portfolio of products and a network that is over 2000 stores in the country. He added that the scale of 70,000 to 80,000 units a month, gives the brand a significant economy of scale and cost advantage.

Lal believes the entry of new brands will further expand the mid-size motorcycle from 1 million to 2 million units in the coming decade and added, "We will certainly be able to hold on 80% market share by the mid to long term." 

"We believe more competition should help grow the market. The outcome (of Triumph and Harley) of this will be that the size of the mid-size market will grow at an even higher pace. We will continue to hold enormous shares and we are not going to cede any market share," explained Lal, adding that there have been 'multiple waves of competition aimed at Royal Enfield’s turf and this is yet another wave'.

When asked how different the competition is this time around, Lal said competitors have attempted to penetrate Enfield’s share over the last decade and a half.  

“I hope, they have learned a little bit from the last 15 years, hope they have some new ideas and new thoughts. We are in the middle of a fanfare period, then there will be a bit of swell in the market, then things cool down, that is when the reality will be seen in terms of products, services, quality. That is life,” he explained.

The MD of Eicher Motors said the competitors (Triumph and Harley) are entering through a contract manufacturing route, which is different from Royal Enfield which manages its overall ecosystem.

“A lot of them are not able to do it on their own, hence they are partnering with Indian partners, and wonder what the Indian partners are getting in return. We are not concerned about competitors, our focus is on customers,” he added.  

Also read: Royal Enfield gears up for a race against the competition