Global Heavyweights challenge RE again

The Market ‘Retro-verse’– 70-80K units within India and 10-15K units global export per month amounting to revenue of approx. 250 million INR (taking average price as 2.5 lakh INR).

The Class – 250cc to 700 cc middleweight retro motorcycle segment. Styling ques from 1940s Britain till late 1970s.

Key differentiations for this segment – Heritage, Fun, Lifestyle, Wanderlust, Cruise, Good to have sort of ownership feel- all related to Holistic Motorcycling experience. Few deviations to cater the growing ADV segment.

The Incumbents (India)- ‘Elephant’-The vintage #royalenfield ‘#Bullet’ that managed to stay afloat and received a new lease of life post 2007 after the launch of Classic. This has helped them to ensure steady sales in following years turning the model into cash-cow and giving the company an experimental mindset to improve their stronghold in the segment. The company has come magically stayed midway in between the old to new in terms of tech/design and features. They have ‘tread through the rough path’ and learnt a lot to survive giving them the competitive edge in terms of customer experience. They had their fair share of failures too with some unsuccessful models as well.

‘The wolf pack’- Bajaj, Hero and TVS are other players in the Indian market that cater to the mass market below 250cc segment. These brands are quite popular in Africa and South America due to the exceptional Indian manufacturing’s value proposition. They have successfully build the capability to counter the Japanese players and almost kept them in check. However, they lack expertise in higher cc segment and heritage.

Royal Enfield’s Core competence – ‘Pure Iron’ -Each and every model in the Enfield lineup packs a formidable punch that hardcore motorcyclist enjoy – the sheer metallic weight, brute torque and easy riding filled with lot of feedback presents a compelling experience second to none. Every model is very different from other and has a strong fanbase distinctively. Dedicated company rides throughout the month ensures company is very much connected to its customers. Also a wide range of Aftermarket accessories and apparel market depends heavily on the Brand. A country dealer and service network also ensure peace of mind while travelling to anywhere remote in the country as well.

Aspiration from various elements- Himalayan, Desert storm, Continental, Trials, Lightning, Thunderbird, Meteor, Highland cruiser and the names of the models that take inspiration from Nature, Geography or sometimes remakes of its old models with same names. Also Military colored versions draw inspiration from its wartime history.

The Legacy- ‘Canon’- It is not all about capturing the customer’s mind but their heart’s too’-The hope of owning a Bullet has passed on from generations into the Indian mindset regardless of unpracticality like high maintenance and operative cost, heavy weight etc. The ever-increasing population and purchasing power has fuelled the sales resulting in waiting period of 60 days on most of the models and even more on highly popular ones. The canon logo instantly speaks about the gun making heritage of the company in old England, the sound of exhaust still echoes with the gunshot sound in a more pleasing manner.

History – ‘Where it all started’ - Since the emergence of motorcycle companies in 1900s till the second world war and to the oil crisis in the 70s various manufacturers evolved, some went on the become global giants and others imply vanished further due to emerging Japanese dominance post the 70s. Indian Market was heavily guarded by Govt due to protectionist policy(red tape) that helped few brand to survive and emerge. RE survived in India as Indian military and wealthy few kept the sales going on till the 2000s.

The 30s to 50s was all about war machines, 50s to 70s about modern classics, 70s to 2000s was all about speed dominance by Japanese. Since 2000s the European Companies made a comeback since they equalled the Japanese in technical quality and capability and then they had their upper hand in country specific core competency in design and function like KTM/BMW/Moto Guzzi/Aprillia and Triumph. Triumph and Norton were the only few surviving British manufacturers in Britain who had to let go of their past in favour of modern engine setup to survive. Also, Harley Davidson enjoyed the niche cult status in USA due to its huge market and nature of US market/mindset that makes it impossible for other manufacturers to compete with Harley, Polaris group has tried to get it that by resurrecting Indian brand with moderate success since 2010s.

The Battlefield- ‘Dunkirk’- Harley, BMW, Triumph along with others tried to enter the Indian market with their expensive offerings that appealed to the ultrarich few and maybe now to the upper middle-class enthusiast, but the market volumes were very low. Harley tried to offer its smallest true-blue v-twin offerings but to no use given the fiercely price sensitive Indian market in which people spend their money if they perceive overall long-term value. Also, Chinese backed global brands like Benelli/Keeway also got a beating due to its Chinese roots and no connection with India in the past.

This lucrative segment has certainly caught the attention of fellow compatriots and global players alike and they are willing to go beyond traditions to capture this pie.

The first ‘Bite’- Harley launched the smaller versions of its big bike lineup by coming down in the middleweight segment in a Legend vs Legend duel with RE. RE kept exploring bigger options and from its failure of Continental GT 535, it also moved up the segment with its 650 cc offerings in a unique fashion- Improved Continental GT designed to bring back the Café racer class back from the 60s and another lookalike relaunch of its popular Interceptor model from 70s. Both these offerings were stellar success in India as well as globally due to the exceptional affordability unheard of in that 650cc segment. It challenged all the players of that segment – Big 4, and even Triumph also got affected in its home turf UK with the mass market moving towards RE from the triumph’s bigger Bonneville range.

‘Need for Speed’ – Bajaj became very confident with the success of KTM brand in India and tried to make a derivative to challenge RE terming them as Elephants in marketing campaigns. The product was faster, bigger, pricier but some minor flaws gave it little success and finally sales slumped to such extent that it is not making an economic sense nowadays.

‘The last Samurai’ – ‘copy is still a copy’ Honda has been World number 1 for decades among the Big 4 and in order to test its strength revived its CB brand with the exact same engine type as Enfield even with same bassy sound but due to lack of heritage and higher price it stagnates with poor sales.

Neighbour’s Envy- TVS hailing from same city and with recent learning from partner BMW, tried to slot a smaller engine with same power in a new city bike aiming to take on the lowest priced model of Enfield but historic “Harris performance” backed Hunter model decimated it within 2 months of its launch.

Jeeper’s creepers – Mahindra group that successfully challenged Fiat group with its jeep DNA SUVs also wanted to foray in this classic bike category by acquiring Jawa/Yezdi brands and revived some beautiful models of the past but a complete different modern motor and same price proved it does not have what it takes in this segment failing miserably.

Italian Flair- Benelli also tried its luck by launching a similar model backed by Chinese technology only to fail miserably due to poor service network and high cost of ownership.

The Battle scene ’Fury’ - During WW2 the Allied Sherman tanks outnumbered the much superior German Panzer Tanks 5:1. When you cannot defeat an enemy by yourself- collaborate and when you cannot match up in technology - outnumber them! German arsenal was outnumbered and hence defeated even with technical supremacy. The situation in India is Royal Enfield has established itself as a hyper brand that clearly satisfies the Lifestyle segment now. It is winning the war here by numbers that is increasing the brand leaps and bounds every year against the highly technologically advanced big brands.

'It’s not about pride anymore, it is personal now'- With no manufacturer being able to dislodge the RE market share of 90%, now the bitter rivalry that is ensuing is 9 vs 1 for this segment - (Harley, Hero, Bajaj, Triumph, TVS, Jawa, Yezdi, Honda, Benelli) vs RE. Huge fan base, solid network, time tested lineup and sticking to core – riding is all that will keep RE unharmed for now. A slew of fascinating new launches lined up at RE with an equally interesting teasers ensures that it can change the tide of this onslaught quickly.

‘Enemy’s Foe is Friend’- Harley chose Hero and Triumph chose Bajaj to develop smaller versions of global models and unleash onto this segment. The result is astounding products that are packing a double whammy to RE. Triumph is gunning with horsepower and Harley with torque. Both these have found kinks in the RE's armor and trying to pierce in the market by coming face to face directly with some of the best running models of RE.

Future- What manufacturers need to understand that even though they can match and exceed RE in tech, they cannot match easily on other less talked about things that RE focusses on:-

1.??????Rider connects- Weekly rides arranged by RE to augment the rider experience.

2.??????Ride events to certain geographic locations specifically like Himalayas, Rajasthani deserts, southern ghats etc.

3.??????Yearly meetup of all riders in events that ensure entertainment and provide new launches.

4.??????Top management rides long distances on all motorcycles to ensure they are aligned with the real customer experiences.

5.??????Huge accessory market to customize each model- both in house and various aftermarket manufacturers.

6.??????Apparels market with collaboration from big brands like Levi's.

7.??????Brand owned store in all major cities directly managed by RE itself. This helps in customer feedback again.

8.??????Country wide sales and service network setup that takes years to grow and replicate.

9.??????Easy finance options.

10.??Giving designers freehand to explore new options in every new model and venturing into new segments up the value chain.

All the above has made RE a hyper cult brand in motorcycling. The brand has carefully built a Great Wall and cemented its image of pure riding. Demand across the globe is so much that waiting time is also not a deterrent. The brand has long reached beyond the mind of customer in to their hearts which, will be tough to replace by anyone.