Enfield India – a lesson in exploring Consumer Behaviour

Royal Enfield the oldest manufacturer and marketer of twin engine motorcycles entered the
Indian market in 1962 with an order for 800 vehicles placed by the Police Department. The
product was the Bullet, a 350 C.C motor bike with a loud impressive sound. Over time the
company was taken over by a South Indian business group headed by Sundaram Iyer. The
company had its manufacturing facilities in Tiruvottiyur a suburb of the city of Madras(later
renamed Chennai). Manufacturing capacity was progressively increased to 80,000 vehicles
per year, and Enfield occupied the leadership position in the Indian Motorcycle market. It
must be mentioned that post 1957, import of many products including cars and motorcycles
was banned by the Government of India which was facing a steadily deteriorating position
on balance of trade(difference between Imports and Exports) and was reserving diminishing
foreign exchange reserves for life saving food grain imports.

One other motorcycle company Jawa Motorcycles was set up in the early 1960s which
offered competition to Enfield, but the combined sales of these two companies did not
exceed 1,50,000 vehicles. Meanwhile the production and sale of Scooters( a World War II
“Jugaad”(improvised) product which was cheap and highly fuel efficient) was increasing and
occupying an increasing market share position in the Indian two wheeler market. These
products had a two fold competitive advantage over the motorcycles. The first was
significantly lower prices( 1964 rates: Rs 2750 per scooter versus Rs. 3600 for a Jawa and Rs.
5500 for a Bullet). The second was the considerably higher fuel efficiency rates( 35km/litre
for a scooter, versus, 19Km/litre for a Jawa and just 14Km/litre for a Bullet.

While the Indian two wheeler market grew by leaps and bounds, the motorbike sector
stagnated. Jawa closed down in the mid 1980s and Enfield could not cope with the
increasing competition from the Scooter sector mainly represented by Bajaj Auto and
Scooters India a public sector giant. Towards the end of the 1980s, the second generation
Sundaram Iyer family threw up its collective hands(the founder had 9 sons who were each
directly or indirectly involved with the failing company). Fortunately a saviour was available,
He was Vikram Lal, the founder of a successful Light Commercial Vehicle player Eicher
Motors who had built a reputation for sound Strategy and Operations Management in the
Auto Industry. Eicher took over Enfield, positioned one of its key executives to oversee and
establish sustainable business for the company. This phase covered a decade and a half.

The Alchemist: In the early 2000s, Vikram Lal the founder of Eicher Motor decided to hang
up his boots and handed over control to his son Siddharth Lal. While the young man entered
the company at the top, there were considerable misgivings within the company’s top and
senior management who felt that the new leader was too inexperienced to handle the
complex responsibilities that went with the top job. However Siddharth proved them wrong.
He felt that Enfield was a gold mine and he proceeded to mine its potential and to extract
huge benefits from the brand positives that Enfield had. It had been the leading brand of
Indian motorcycles with an iconic inheritance from the British global player Royal Enfield
who had been one of the pioneers in the two wheeler industry. Siddharth used the
promotional ladder to take the craving for the brand to new heights. One of the vehicles
was to set up and encourage “Roady groups” to travel around exotic routes and delicious
destinations including places of pilgrimage and holiday destinations. These groups who were
financially supported by the company were relied on to publicise the product and its virtues.
The enthusiasm and dedication went a long way to spread positive messages regarding the
Bullet both from the efficient and economic perspectives but equally if not more so, as a
fashion statement. Owners of these vehicles were seen as “cool and elegant” and makers of
a growingly popular endorsement for “make in India”. The products were spruced up, with
glossy coats of paint and with stainless steel sheet metal parts. Light fittings further
enhanced the appearance of the bikes, and large well cushioned seats increased the
comfort factor. Further competitive enhancements included improved braking, better
acceleration and last but not least, increased fuel efficiency(Bullets of today enable a fuel
consumption figure of 23-24 litres per litre which is almost double the old rates and
compares reasonably with the brand offerings of global leaders includingHonda, Kawasaki,
and Suzuki.

Enfield India in 2018 reached a sales level of 1.2 million vehicles and maintained a healthy
growth rate over the preceding 5 years. The popularity of the company’s products is high
and India’s young aspirers and affluents are hitched on to the company’s marketing
bandwagon. Word of Mouth is a big influencer and has played a significant part in the
company’s efforts to increase volumes and market share. The firm has entered and is
viewing growth in markets as disparate as the U.S. on the one hand and Indonesia on the
other. Very few would have predicted the heady success that Enfield India has achieved and
is committed to maintaining in the foreseeable future.