Financial Daily from THE HINDU group of publications
Monday, Mar 08, 2004
`Royal Enfield has an iconic status'
Chennai , March 7
RIDING on the success of the upgraded version of Bullet Electra, Royal Enfield is confident about reaching its targets for the year.
At the launch of the upgraded Electra in September last, Mr Siddhartha Lal, Chief Executive, Royal Enfield, had told reporters that the company hoped to sell about 30,000 motorcycles in 2003-04 against 28,000 the year before. The Electra accounts for more than 50 per cent of Royal Enfield's sales. The company believes the Electra and Thunderbird will help it reach its targets.
Mr Lal, an economics honours graduate and a postgraduate in automotive engineering, is an avid motorcyclist himself. In this interview, he talks about Royal Enfield and its prospects.
"Bullet is legend in India and Royal Enfield as a brand has achieved an iconic status in the country," he says.
Royal Enfield, with expected turnover of Rs 200 crore this year, is a division of Eicher Ltd.
How has the company's performance been so far this year? Are you on course to meet your target of selling 30,000 motorcycles in the domestic market and exporting 2,000 units?
Our performance this year has been quite good and in February 2004 our sales crossed 3,000, registering a growth of 21 per cent. Our latest model 2004 Bullet Electra and Thunderbird have helped us to bring in more customers into the fold, thereby giving incremental volumes. We hope to get closer to the targets.
You occupy a very niche segment, the size of which is small compared to the overall two-wheeler market. What are you doing to attract new buyers? What about the export market?
Royal Enfield motorcycles offer riding comfort, attractive beat, distinctive styling and overall a unique motorcycling experience. We have introduced new models and variants with enhanced comfort, styling and performance features such as the Thunderbird, and the Bullet Electra, which has gas filled shock absorbers for the first time in India on any motorcycle. These have particularly appealed to the younger audience and have helped us to enlarge our customer base.
Exports are a small but important portion of our business. The UK and USA are our big markets. We are looking at growing export numbers in medium term and in the next two to three years we should start seeing good results.
What about your plans to unveil a totally new bike in the next financial year? What will be the engine capacity and how will it be different from your existing products?
We are currently working on and testing a full new Royal Enfield engine, which will be first available on an all-new bikes in Royal Enfield's 50th year in India - 2005. This bike is primarily targeted to attract a bigger set of customers who always wanted to buy a Royal Enfield but felt it to be unapproachable.
Could you give an idea of the R&D plans and expenditure? Will future bike development, including engine, be done in-house or sourced from outside?
As I mentioned earlier we are working on and testing a full new engine which will be introduced in the market on an all new bike from Royal Enfield.
Also, we are in an initial stage right now on exploring other new engine platforms, which will be introduced in our future bikes.
Are there any plans to expand capacity at the Tiruvottiyur plant? Investments?
Not as of now, and we shall look into it as and when it is necessary. Our investments will be through internal accruals and other sources.
How long do you think the Bullet magic will work in your favour?
Bullet is a legend in India and Royal Enfield as a brand has achieved an iconic status in the country.
With our efforts to bring in new products, value added services to enhance the motorcycling experience of our customers, and marketing efforts we hope the Bullet magic increases and spreads to a wider segment and appeals to the new generation of the younger motorcycle audience.
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