People are crazy about owning a bit of history, which our company can offer.

In an industry that has seen the traditional warhorses buckle under pressure, 28-year old Siddhartha Lal's entry as the new CEO of Royal Enfield Motors, has turned the spotlight back on this unit of Eicher Ltd, which was all but written off even until a year ago. Can he turn around the company that gave India its first credible bike - Bullet? Everyone wants to know if the new launches from the company - Thunderbird and Bullet Electra - are just a flash in the pan or part of a bigger strategy to rule the Indian roads. When Shamni Pande of agencyfaqs!, met the scion of the Lal family, she found he is taking his task of turning around the family business very seriously indeed. He says, "My gameplan is simple. I am counting my success in the few thousand bikes that I sell every year. I am here to offer a differentiated product that meets the requirements of Indian consumers who want powerful, efficient, safe and comfortable vehicles."

Edited Excerpts

Royal Enfield today is the oldest motorcycle company in the world. It has been around as a brand since 1930 and it has been in India since 1955. We were the first to introduce motorcycles in India, the first in gearless scooters. We have many firsts to our credit. But all that is part of our heritage and golden past. For the present, let me say that we have pretty much found our feet and strength in terms of direction, in terms of where we are going and who we want to be.

I don't know what is the market perception about the company but we are working at being 'different'. Why I say 'different' is because the Indian market is dominated by the commuter-kind of vehicles and beyond that is an open house for us to play in. Today our strongest brand is the Bullet and in India, for decades now, it is identified with being a powerful, rugged, comfortable and safe motorcycle. At this point in time that is a well-established identity for us, but this does not mean that it is the only area we want to be in. We want to enhance the motorcycling experience by offering different kinds of products. However, I have to acknowledge that though we have established ourselves as the marketer of a strong and powerful bike called the Bullet, that product has become dated and has only a very limited set of devoted buyers.

We have had the same standard black bike for years and slowly we went out of the consideration set of people, as they do not see their need being fulfilled by a product that is dated. Don't get me wrong, I love our standard black bike that has a cult status; but over time, in the context of young and new users we lost out, as we were not seen as a vibrant, dynamic company that has the ability to fulfill the changing needs of consumers.

Against that background, we are not taking a 180-degree turn, but we are trying to build our portfolio by offering new bikes at different levels that can offer a different motorcycling experience and yet meet the needs of the current generation of users in India. Again, I use the word Indian, because bulk of the Indian commuters uses the bike for reasons very different from their western counterparts. In the West, the bike is a luxury, a hobby, a symbol of being different. It is not a vehicle that people buy because they are unable to afford a car.

Coming back to our stance, we will be offering a variety of power bikes that not just meet the commuting needs of people, but are able of offer much more - a genuine sense of adventure, an ability to cope with long-distance hauls etc. There are over 10 million commuters in India today and with the public transport system under pressure, there are many who have used the 100-cc bikes to go from point A to point B in the cheapest possible way. There are many in this category who enjoy the motorcycling experience and want to graduate to different and more powerful bikes. That is where we come in, as that is the consumer I am looking at.

Okay, even if you take an off-the cuff figure, and say 80 to 90 per cent of the people who buy bikes hope to graduate to cars eventually, this still leaves us with a considerable 20 per cent or even 10 per cent of the market to play with. That is an excellent start for us. After all, we too have a very small base to build on right now and eventually market needs and tastes are bound to change. People are constantly on the lookout for something different and that is where we want to maximise our potential by offering a stable, sustainable alternative. We want to offer the things they are used to from their other bikes and something more.

On a purely monetary/economic justification for my stand, let me tell you we have not had to make massive investments to offer our new range. The platform for these exists with us and only small investments were required on the design to create a new look. What we are working on is expanding that base. I agree that if we were to launch a bike from scratch in a new segment, then the costs could not have been justified. Also, I am working on a small base of just 2,000 bikes every month. So I can afford to strike in the direction and segment that I am keen on, unlike established players who have dreams of huge investments and a huge consumer base. Besides, the margins in my segment are certainly better than those in the economy segment. In short, my product plan has been worked out after a judicious calculation of all the costs involved and after incorporating the factors indispensable for success.

We have not withdrawn Lightning; we continue to make it for people who still want it. But yes, these launches did not go off too well as we felt certain changes had to be made to sustain our new focus. While we offer powerful bikes, we also need to incorporate certain features to meet the needs of new users. Let me explain that further.

All our old bikes have the gear change on the right, while most of the new bikes have it on the left. Keeping in mind the convenience of new users, in the new bikes the gearbox was shifted on the left side. Such small tweaks and shifts have been made to make our products more acceptable, more comfortable for new users. That is because the new generation of bikers felt that our bikes were not for them, but for some other breed of bikers.

We have identified gaps in our products and positioning and are filling those. For instance, in the Bullet Electra we have introduced a feature to make starting the bike much easier. The bike is available in several colours to make it look interesting and relatable to new users. The new look also gets people into the showroom and they get to sample the other new products we have on offer. Earlier, product sampling was simply not happening. People have seen the black bike on the roads; so there was no reason for them to go to the showroom. Now that the change in the product design has pulled them into the showroom, they are able to check out the price, the maneuverability of the product, and they are forced to change the perception about the company.

The second big area that we are working to streamline is our distributors and financing schemes. I realised that we could offer the earth, but it has to be made easily available. If people face hassles in buying, then they will automatically switch to those that they perceive as hassle-free purchases. At the end of the day, the consumer's concern after locating the product they like, is buying it easily. What's more, they are more worried about their payout at the end of every month, rather than the final price-tag. Yes, price is a significant decision at the initial stage, but after that, their immediate concern is their monthly expense on it.

We are ironing out those areas and making the entry of consumers into our fold as easy as possible. We realise today that word-of-mouth is the biggest publicity that a company needs. If one consumer is satisfied he will go and tell many others. Also, this may sound frivolous, but we have figured that the youth today want different and interesting looks. Bikes that look powerful and cool, but are easy to handle and maintain.

So, we are working at giving the right combination of product and purchase experience to create a buzz in the market. As for where we want to be, I think there is no doubt in our minds any more. We want to be in the power bike and cruiser bike segment, in the segment that is an alternate and supplement to the bikes already available in the marketplace. There is no point in trying to be one more player in the popular motorcycle segment; there are enough and more players to meet those needs of people very ably.

We cannot avoid spends on media, but yes, it will be very limited and object oriented or goal oriented. It will certainly not be a general splash; we certainly do not intend to have brand ambassadors, stars etc to flash around. Our brand ambassador is our product, Bullet is legendary and we will build on that image. In any case, we have very little budget and money to play with.

I keep hearing that term a lot. Let me put it this way. Yes, we want people to talk about our products and it is happening already. Beyond our efforts to line up new products, grow our distribution network, and offer better finance schemes, we are not working consciously on any other strategy to create a buzz in the market.

We are looking at extremely evolved and challenging markets such as the US, the UK and Europe. It is small, but an extremely significant market for us. We sell a thousand-odd bikes in these markets currently, but the numbers are growing.

Take the UK market. We managed to sell 600 bikes in the UK alone. I am studying the needs of this market and am hoping that I will be able to offer them bikes that will meet their requirements and stipulations. As I mentioned before, people in these markets want bikes for very different reasons. They seek to stand out, they wish to be unique, they want huge, powerful bikes they can take off on for weekends. The fact that is helping us hugely is that people are crazy about owning a bit of history, which our company can offer. This will, in the next three years, be a very big area for us and we are working to offer these markets much more.

We have already achieved cash breakeven with our turnover of Rs 145 crore for the year ending March 2002. We hope to achieve a volume growth of 25 per cent and a value growth of 30 per cent this year. We hope to sell 30,000 vehicles and achieve a turnover of Rs 180 crore this year.

No. For the simple reason that in the 350-cc segment we have no competition. In the power and style segment, our market share is 13 per cent. As I said before, whatever the others choose to offer, we will be different. And these are not empty words, we have already made major inroads.