Eicher Motors Ltd: Royal Enfield Comeback
EICHER MOTORS LTD: ROYAL ENFIELD COMEBACK
MADE LIKE A GUN… GOES LIKE A BULLET
Senior managers at Eicher Motors faced a tough choice; to shut down or revive the loss making Royal Enfield – their motorcycle division one final time. For that they wanted to modernise the bikes to appeal to a wider customer base. But existing customers wanted their Bullets just the way they had always been. By modernising, Royal Enfield risked losing traditional fans without possibly gaining any new customers. The case study details how it met the challenge.
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. “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.”
“Instead of being a mediocre player of 15 business, being a market player of 2 business is worthy” Lal stated. Thus the company dissolved 13 of its 15 products and focussed wholeheartedly on two, which included the revival of Royal Enfield business.
History of Royal Enfield:
The Royal Enfield motorcycles is one of the oldest living automobile franchise in the world. It is known as the tough beast, the ultimate warrior and the ever ready thing to go to places on. Royal Enfield was founded back in 1893 by George Townsend & Co. England with the motorcycles officially rolling out in year 1901 where it took the world by storm. The World War 1 and 2 witnessed this invention at it’s peak.
One of the most revered brands in India has been the Royal Enfield Bullet. Owning and rising one wasn’t just a matter of pleasure, for most it was a symbol of attaining manhood. Such is the aura of the brand, one of its riders who crashed his bullet into a tree on the Jodhpur highway got immortalised as ‘Bullet Baba’ as per the Economic Times 2000 article.
But many don’t know that Royal Enfield was originally a British company, which shut shop in 1971. In early years of 1950 decade the Enfield motorcycle company was merged with the Madras Motors so as to serve the demand, to supply motorcycles to Indian Army post independence. Till than the engine parts were imported from England and assembled in India. The bike maintained it’s legacy but the demand slowly started fading as the Japanese companies came into Indian market. This motorcycle enjoyed the crown until Japanese companies such as Yamaha, Suzuki and Honda came into practice.
With most of the facilities around the World being shut down or not practiced any more, the good old Royal Enfield found it hard to survive. Till year 1990 the vintage motorcycle saw the worse and the production decreased drastically, but in 1994, the Eicher Group acquired both the company as well as the brand. Since then, the brand has taken many strides.