The runaway growth in motorbike sales over the last few years in India has a niche player hungering for a larger share of the pie. By Pawan Chabra

IIPM makes record 10,000 placements in five years

They never cared two hoots about competition, did not encourage scantily clad babes in their ads and barely batted an eyelid before blithely including a comparison with a tractor in their feature list. Obviously, Eicher Motors’ Royal Enfield has had much more going for it than the sheer deep thump of its rakishly upswept silencer. The downside has been that even as Bullet’s cruiser imagery sells 45,000 bikes every year, Hero Honda makes hay in the commuter segment with unit sales crossing 35,00,000 annually. Sure, one should not compare – after all, bike enthusiasts worship the ground that the stylish Bullet walks on, while Hero Honda is merely a convenience for your daily office-goer. Siddhartha Lal, MD, Eicher Motors agrees, “We have no comparison with mass manufacturers. Royal Enfield riders use their bikes for purposes beyond commuting.”

But quiz Lal a little further and you realise that some changes in existing strategies at Enfield are in order. The niche bike brand, which has sold a meagre five lakh units in its 56-year-old history in India, is now targeting a bullish figure of one lakh annual unit sales by 2013. Explaining short-term targets, Lal says, “We are planning to touch 50,000 unit sales in 2009 (targeting a 15% rise year-on-year), followed by a target of 60,000 for 2010.” Already plans are in place for a Rs.65 crore investment over the next three years at its Chennai plant to double production capacity. Question is, can this planned doubling of sales turnover by 2013 be possible without tapping at least a little into the mass markets, presently dominated by Hero Honda, Bajaj and TVS? But the dilemma then is, will the Bullet come down a few notches from its cruiser positioning or is there more method to this strategy?

Company insiders are at pains to point out that their new ambitions can be achieved without any dilution in brand equity. “We have been able to sell whatever we manufacture and almost all our models have a waiting list,” explains R. L. Ravichandran, CEO, Royal Enfield. Clearly, Bullet’s established aspirational quotient amidst the Indian consumer is fuelling the ambitions of this bike company. Not putting all its eggs in the domestic market only, Enfield is also working on increasing its already expanding global reach. Its ventures in various developed markets are already a success. “We are exporting 5% of our total sales now. But we will take that to 15% over the next three to five years,” vows Lal.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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