It might seem like the dream job today, but back in 2000 when Siddhartha ‘Sid’ Lal took over as CEO of Royal Enfield, it was a rather unenviable role. Eicher Motors, the parent company, was all set to axe the bike-making operation (what a pity that would’ve been for the world’s oldest motorcycle manufacturer in continuous production) until Sid convinced (some versions say begged and pleaded) the board members to give it one last chance.
Their approval was not so much out of confidence in Lal but from the fact that the business could hardly be doing any worse than it already was. Back then, if you’d put down the Rs 55,000 or so to purchase a Royal Enfield motorcycle, today you’d probably have a steadily rotting, oil-leaking waste of space in your garage. But if you’d used the same money to buy Eicher Motors shares, today you’d be sitting on a fortune of around Rs 3.5 crores. And you could use some of that fortune to buy a modern RE, a vastly improved and far more desirable machine. Such has been Lal’s turnaround of the brand.
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Having made a last-gasp effort to keep the company alive, Sid could then start the revival in earnest when he was appointed COO of the Eicher Motors group in 2004 as a fresh-faced 30 year old. At this point, the group consisted of 15 businesses, none of which were a market leader in their respective segments. Lal made a decision to focus the company’s efforts, saying that he would rather be market leader in one or two businesses than be a mediocre player in 15. The decision was made, and Eicher Motors divested 13 of the 15 companies, leaving just Royal Enfield and the Eicher trucks division.
In 2005, RE sold about 25,000 bikes and was struggling to break even. But Lal knew that the business could be profitable. It just needed the manufacturing scale. He was sure that if fixed costs could be spread across 100,000 motorcycles, Royal Enfield would be a profitable entity. Fast forward one decade and Eicher Motors generated a net revenue of Rs 8,738 crores and made a profit of Rs 702 crores, with 80 per cent of that coming from Royal Enfield.
Sales were upwards of the 800,000 mark in 2018-19. A large part of that is down to the fact that modern-day REs are better built, more reliable motorcycles than their predecessors. Being an avid motorcyclist himself, he’s taken the company from CI to UCE engines, carburettors to fuel-injection, singles to twins, and from oil-leaking rust buckets to smooth-running tourers and cruisers. The 650 twins are a testament to how far RE has come technologically, and the upcoming J platform (which will kick off with the new Meteor VERY soon) will write the next chapter in the single-cylinder book too.
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It’s not just the products that have improved either. The entire buying experience has been re-marketed to be a far more upscale affair. Remember what we said about RE being the world’s oldest bikemaker in continuous production? It’s using that to its advantage, tugging at people’s heartstrings and converting customers into buyers with emotional appeal. The brand has managed to associate itself with a certain degree of patriotism, helped in no small part by the widespread use of REs in various arms of the military. Heck, even then-POTUS Barack Obama gave a shoutout to the BSF Daredevils for their acrobatics on REs at the Republic Day Parade.
"Siddhartha Lal is Royal Enfield’s biggest asset," said RL Ravichandran, CEO of Royal Enfield from 2005 to 2010. But of course, it isn’t all down to just one man. It’s also about having the right people in the right places. 2014 saw Royal Enfield take on Rod Copes, a 20-year Harley-Davidson employee, as head of the North American Division, and Pierre Terblanche, a motorcycle design stalwart and former Ducati employee. Though both individuals have now left the company, their contributions cannot be underestimated.
James Young, the current head of engines, and Simon Warburton, head of product development, have both made their way over from Triumph. Indeed Royal Enfield’s Technology Centre, opened in Leicester in 2017, is less than half an hour away from Hinckley where Triumph is based, and a fair number of employees have been poached from the iconic British brand. The Centre, as well as the team of over 100 people working there, will stand Royal Enfield in good steed as Siddhartha Lal leads the brand into the next generation…
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