Royal Enfield: The Bike That Refused To Die | Bullet’s 125 Years Business Story

[00:00:00]That deep, rhythmic sound of the engine tells the whole street that someone macho has arrived on a Bullet, as some colloquially call it. The Bullet is the long-distance friend the bike riders trust to go all the way up to the mountains. The devotion runs so deep that some illegally alter their engines to make their Bullets thunder like firecrackers. But, did you know that in the year 2000, the Eicher Group, aka the Royal Enfield Company, was about to shut down this highly loss-making Bullet over five decades? Three owners had tried to make the brand work, but each one of them failed miserably. In a New Delhi boardroom, the top brass had almost made their decision. But, then a 26-year-old stood up and asked for one last chance.

[00:00:43]Though they didn't believe in him, they still gave him the chance. Not just because he was the son of Eicher Motors CEO Vikram Lal, but also because the young Siddhartha Lal had technical expertise in automotive engineering. And he had always ridden his father's Bullet and had built a deep passion for it.

[00:01:00]Originally a military hardware company in England, Enfield Cycle Company built its first motorcycle in 1901 with the slogan "Made like a gun." In 1931-32, the Bullet model was born. Perhaps taking the gun reference further, even though the bikes performed exceptionally well for soldiers in the two World Wars, when civilians started riding them after 1945, they faced high maintenance, frequent breakdowns, and heavy frames that made it hard to handle. Meanwhile, Japanese motorcycles had also entered the British market with lighter, cheaper, more reliable bikes. So, looking at the rapidly collapsing UK operations, the Enfield Company pivoted to India, partnering with Madras Motors to form Enfield India in 1955. Supplying 800 rugged 350cc Royal Enfield Bullets for independent India's army and border patrol police, that sustained the forces for a long time. But, through the 1960s and '70s, it were the Indian-made rivals like the Rajdoot and Jawa Yezdi that occupied the mass market, leaving the Bullet a niche premium machine.

[00:02:06]Meanwhile, back in the UK, the original company dissolved and closed the factory in 1971, leaving operations only in India. Now, Japanese bikes invaded India, too, in the 1980s, entering via JVs with Bajaj, Kawasaki, Hero Honda, and TVS Suzuki. Indian consumers aggressively shifted to these fuel-efficient and low-maintenance 100cc and 150cc commuter bikes, once again killing the sales of Enfield. Facing imminent collapse, Enfield India formed a strategic alliance with the Eicher Group in 1990, selling them a 26% equity stake to keep the production lines running. Back then, Eicher produced tractors and commercial vehicles and invested in Royal Enfield just to leverage its unused manufacturing capacity. But, by 1994, it was interested enough to acquire the entire company, renaming it Royal Enfield Motors Limited, and tried to revive the brand. But, zilch, nothing. As sales fell to 2,000 units a month against a 6,000 unit capacity, with the company running at a 1/3 utilization for the next 6 years. So, the board made its decision. Royal Enfield would be shut down, and the only thing that stood between the brand and its obituary was 26-year-old Siddhartha Lal. Siddhartha was an automotive engineer and handled small tractor and mapping divisions.

[00:03:27]Ready to charge of Bullet, the first thing he did was he got on a Royal Enfield and rode for months across the country. He stopped to talk to bikers at dhabas, petrol pumps, at mechanic shops, anywhere riders gathered, and asked them why they had stopped buying Royal Enfield. What he heard would have been embarrassing to any product manager, let alone the CEO, as it exposed their decade-long problems. Royal Enfield bikes were arriving at dealerships already damaged internally and customers only found that out once they had started riding their mean machine. In many cases, the cast iron engine was leaking oil as it was outdated compared to the tech standards that time. The kick start was so badly designed that riders were physically hurting themselves every time they tried starting their bikes who ended up spending more time at the mechanic in the first year than they had expected.

[00:04:15]Even visiting the Bullet stores was a rough experience where staff acted like doing customers a favor, but fixing these problems was risky because the same flaws that made the Bullet painful was also what made it feel authentic to its loyal fans. That is why Royal Enfield stayed stuck for years as fans loved it as a symbol but rejected it as a modern motorcycle. So, armed with all these insights from his interactions with fans, Lal began making major changes. The first big structural decision was selling 13 of Eicher's 15 businesses, footwear, garments, tractors, components, and shifted the entire focus to just two, Royal Enfield and truck. Then he overhauled packaging and logistics so bikes arrived at dealerships undamaged. The most consequential technical fix was combining engine and gearbox in one casing while switching from a cast iron engine to an aluminum one which is three times lighter by volume. This engine change alone dropped 15 to 20 kg of the bike's weight transforming handling, acceleration, braking, and fuel efficiency all in one move. The stores were rebuilt into modern spaces with retro, loud, and aspirational design so everyone would stop and stare. He also insisted his employees all go on a road trip and talk to riders making customer empathy a company-wide operating principle. But they were still selling only 25,000 bikes a year because maybe in the 2000s Bajaj Pulsar was becoming the symbol of fast city biking among college boys and office riders. And for Eicher to make a profit, the factory needed to make and sell 100,000 bikes a year to cover its basic bills. So, Siddhartha organized events like Rider Mania, a three-day festival combining motorcycles and music, which drew thousands of riders, turning customers into a tribe, similar to what Aman Gupta tried with his audio brand Boat. Watch Biz Bo's story. However, unlike Boat, Enfield took a completely different route, building its appeal around heavier, more macho vibe that looked more like a personality cult. All the while, behind the scenes, Siddhartha kept improving the supply chain, tightened factory quality, and made the motorcycle less painful to own. It organically built a massive cult following in India as several major Hindi films like Zindagi Na Milegi Dobara and Jab Tak Hai Jaan featured these bikes. And by 2010, in 5 years, sales doubled to 50,000 bikes. But, there was a new problem. The company was producing three completely different types of bikes, making each model too expensive and complicated to manufacture. It was then that Siddhartha decided to stop making three types and build just one single base for all bikes. And from this single base, launched the Royal Enfield Classic 350 with retro looks and improved reliability that became the bike that changed everything so remarkably that their sales went up from 50,000 in 2010 [cheering] to over 3 lakh units in 2014, a six-time jump in just 4 years. That year, Royal Enfield's annual sales exceeded the worldwide sales of Harley-Davidson. Siddhartha even set up a state-of-the-art tech center in Leicestershire, UK, to engineer the 650 cc parallel twin engine. And in 2018, Royal Enfield launched the Interceptor 650 and Continental GT at roughly half the price of a comparable Triumph Bonneville, one of the most famous and iconic lines of motorcycles in history.

[00:07:40]This launch marked a satisfying historical loop where the classic British band that went bust in the UK and survived purely on an Indian lifeline returned to Britain designed to make its global comeback. The Interceptor even won Motorcycle News Retro Bike of the Year award multiple years running. By 2023, Royal Enfield sold 920,000 motorcycles in a single year, 36 times the 25,000 sold in 2005. Seeing its success in 2022, Mahindra bought and resurrected Yezdi, which had shut production 20 years ago targeting the same customer base who buy Enfield, but it has a lot of catching up to do. Royal Enfield now exports to 50 countries, has a direct distribution subsidiary in North America, and runs a new large-scale manufacturing facility near Chennai. It has just launched its very first electric motorcycle called the Flying Flea with a more modern, light design to appeal to Gen Z. So, its next decade will now be decided on whether a brand whose entire identity was built on sound and bullet culture can survive becoming quiet, light, and effortless.

[00:08:49]Biz Bos Limerick: Royal Enfield was losing its roar. The board nearly shut every door. Then a young man came and reignited the flame till the Bullet was king once more.

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