Royal Enfield, the maker of the Bullet motorcycle, is on a roll today, but its Chief Executive, Dr Venki Padmanabhan, believes a lot more needs to be done.
“It is an amazing brand, but by the end of the day it is all about execution. The way we are going to become a real company is that we got to make and keep promises. For our customers, quality has to get better and we must ensure better bikes,” he told Business Line .
Concerns
At one point, Royal Enfield primarily dealt with diehard Bullet customers, but things have changed with the Classic. The company now wants to make its bike portfolio ‘worthy of the market's love' by putting an end to niggling issues such as paint rust and mechanical squeaks.
“The good thing about the brand is that people want a relationship with it and are tolerant to the extent that we are responsive,” Dr Padmanabhan said.
The other issue concerns the long waiting period, and this will be solved once the new plant starts churning out bikes by mid-2012. Indications are that it will be located in Tamil Nadu, not too far from the present facility near Chennai.
Royal Enfield has targeted production of 70,000 bikes this calendar, up from 52,000 units in 2010.
The new plant will have a capacity of 1.5 lakh units, which will help overcome the present supply-demand mismatch.
In the interim period, there is some out-of the-box thinking already in process. For instance, to overcome the paint-shop constraints, TI Cycles is helping out Royal Enfield by painting mudguards. Likewise, the old Kinetic plant in Ahmednagar is painting other key parts.
“Act 1 is to make the brand worthy of customers' love. Act 2 is making the product worthy of the brand. When you fix the brand and quality, you give them what they want which is Act 3. At the moment, we are somewhere in the middle of Act 2 and getting ready for Act 3,” Dr Padmanabhan said.
Once the job is done, the company is confident that customers will vouch for its bikes as ‘an extremely good value on par on quality' with others in the business.
The next step of building a plant/paint shop will be followed by scale across the world in those 30 countries where the bikes are exported.
International markets
“The purpose of the company was to cater to the Indian market, but the bikes are international, and the faster we do that, the better it is. We have been constrained by our own initiative and need to be more engaged with international markets,” Dr Padmanabhan said.
What is bizarre yet true is that Royal Enfield manages its global business with just a handful of people in Chennai who place and take orders. Not too long ago, there was an enquiry from Argentina which was unattended to.
“The lady and her father then came down to Chennai to meet the guys, and today there is a store in Cordoba which is one of our most beautiful retail outlets,” he said.
However, the ‘really hard part' lies in attracting likeminded leaders and the right talent to Royal Enfield. Dr Padmanabhan believes that a sea-change has to occur in the mindset.
“The secret is not getting brand new people but to find the guys who have an open mind and mix them with those from outside to create a new reality,” he said.