ROYAL ENFIELD

History:
Royal Enfield India Pvt. Ltd., the two-wheeler motorcycle division of Eicher
Group is considered as one of the best in two-wheeler segment today but
decades ago the case was not the same. Royal Enfield was on the verge of
bankruptcy.
Established in 1955 and being one of the oldest motorcycle company, Royal
Enfield merged with Eicher Group in 1994, 3 years later Eicher Group bought
26% share of Royal Enfield. In 2000, the company sales hit a low of 2000 units
per month because it was suffering from problems like poor quality of its
product, outdated design, change in taste and preferences of consumers and
entry of cheap Japanese motorcycles.

Issues faced by Royal Enfield:

Since 1949 Madras motors which is the dealer for Royal Enfield in India, sold
350 CC motorcycle known as ‘Bullet’. In 1957, Royal Enfield India started full-
fledged production and produced Bullet 350 even after production was shut
down in UK. Enfield India formed alliance with Eicher Group in 1990 and later
was taken over by Eicher Group itself in 1994.
However, the decision made by CEO Vikram Lal to buy Royal Enfield India turns
out to be most disastrous decision. The business was doing bad. The
management discussed various aspects as in order to pull the company from
bankruptcy. The year 2000 was decisive as Eicher Group has to either
shutdown or sell the brand as the company was hardly selling 2000
units/month with a production capacity of 6000/month in Chennai based
plant.

The Revival of Royal Enfield:

It was 2004 when Siddharth Lal has taken over as CEO of Eicher Group.
Siddharth is the man who is responsible for turning all the tables and taking
Royal Enfield to the position it is today. Siddharth started working in company
since early 2000 when company was on a verge of bankruptcy. Siddharth
started to live in the consumers way. Siddharth Lal who is a biker himself,
started approaching products in the perspective of customers. He started

Classification: Internal
 testing the bike himself with other consumers and felt that the older model
had issue with right side gear shift, braking and hand kick which could break
legs easily. He also found that the bike were selling less not because of its high
price but the maintenance cost follows.
Company faced issue with sales of the bike because of the psychological
behaviour of consumer as they considered Royal Enfield as a tourist bike that
cannot be used for daily purpose. Royal Enfield felt that emotion sells at a
higher price. As Siddharth advertise in 2000 “Be the change”, Royal Enfield
adapted the change to be the cult classic. People thought that Royal Enfield
was changing as a result of the newness of bikes and the cult which was set by
Siddharth to adopt the classic bike lifestyle in daily life. Royal Enfield arranged
many biking event in Ladakh, Goa, etc. to drive the cult among customers.
The idea that people riding Royal Enfield are not like other people, gradually
began to take root in people's minds.

The new change in the organization:

After early 2000 the product mix of Royal Enfield is great. As before they were
stealing only bullet 350 and 500 but now look at the line-up. Royal Enfield has
standard street to retro straight cruiser to cafe racer. The change in mindset of
the employees made all this happen.
As Mr Lal said “The board agreed to give me a chance. It was not because of
me but the business was doing bad, it could hardly get worse”. Lal felt Royal
Enfield could still survive. The bike had its reputation, an instantly recognizable
build and an aspirational value. Changes have had to be made to keep up with
times and make the bike more acceptable.
Going against the die-hard fans of Royal Enfield was difficult. In 2000, when
Royal Enfield was set to launch two new bike with change in design, there were
many negative reviews. People were addicted to the vibration that the old in
engine produces and right side gear shift. Still the decision of Royal Enfield
going with the new changes were received successfully later.
Availability of the bike to consumer was changed when Royal Enfield
established a dealership and its headquarters of North American division at
Milwaukee in Wisconsin. Royal Enfield now has a comprehensive distribution
network that comprises a variety of dealers and stockist, allowing it to readily

Classification: Internal
 rerun consumer markets. It has 394 dealership stores in India located in every
state and three union territories.
Royal Enfield has launched many innovative campaigns with help of electronic
and print media. Today its presence can be seen everywhere including TV
shows and ads. Social media awareness campaigns were also launched at
social media portals like Facebook, Instagram, Twitter and YouTube. Royal
Enfield always focused on needs of the consumer to boost sales.

Classification: Internal