The motorcycle industry enjoys unique bookends, at one end are well-known names with established brands and dealer networks; Harley-Davidson, Honda, Suzuki and Victory are some who could be counted among this number. At the other, newer marquees building the needed commercial infrastructure to sell their new models such as Motus, EBR and to some extent, the relaunch of Indian Motorcycles.
But these extremes are colliding as one of the oldest, continuously produced motorcycle brands finds itself at both ends of the bookends with Royal Enfield in the process of putting industrial blocks in place to move motorcycles from its factories to the showroom floor. There’s also an additional effort of taking building traditions synonymous with the Royal Enfield brand and improving them to meet higher production numbers.
These are just some of the challenges being faced by Royal Enfield, both at an international level as well as in North America. Clutch and Chrome has some insight to the measures and steps being taken to clear these motorcycle hurdles.
As a quick catch-up, the 115-year-old Royal Enfield sells various models, including its iconic Bullet Standard, Bullet Classic, Thunderbird and the high-end performance bike Continental GT. Readers who may not fully know the rich history of Royal Enfield should head over to Clutch and Chrome’s ‘Royal Enfield - A Colorful Motorcycle History’, a short and entertaining ride through the company’s interesting journey to present day.
The latest chapter being added to the ongoing story of Royal Enfield could be considered as demanding as anything the motorcycle manufacturer has faced in its 115 year history. Though some may say the current drive to ‘own’ its distribution networks and improve production may've come about after a recently announced aggressive growth plan, signs of change were being seen as early as 2011 when sales started to rise by 50% each and every year.
This growth meant the demand for the Indian manufacturer's iconic motorcycles outpaced the company’s ability to build them. In response, the company built a new manufacturing facility in India, spread over 50 acres with the new plant adding a production capacity of 150,000 units when first opened. By 2015, Royal Enfield were producing 450,000 motorcycles a year.
To put this in perspective, at the end of the same year Harley-Davidson sold 265,000 motorcycles worldwide.
Mr. Siddhartha Lal, MD & CEO of Eicher Motors Ltd rolling out the first Royal Enfield Desert Storm from the new Orgadam Plant
Want to add even more ‘wow’ to these production numbers?
Of Royal Enfield’s total production, motorcycles sold outside of India only amounted to three percent of the company’s sales. To further emphasize the popularity of these bikes, even with the increased production there were reports some riders waiting up to five months for their new motorcycles. Is this Déjà vu for Harley-Davidson fans and owners?
All these are pretty stunning numbers and to understand the 'how' and 'why', here’s some of the secret sauce to Royal Enfield’s success.
To start, they have a huge home field advantage. The country of India only accounts for 2.4 percent of the world surface area yet it's the second most populated nation in the world with 1,236,344,576 people as of 2014. As a comparison, the United States is the third most populated country with 318,892,096 a quarter that of India. What makes that population number even more powerful, two-wheeled transportation is much more popular in India than it is in the U.S. with many turning to motorcycles and scooters as their first choice of transportation.
At first glance, the parent company of Royal Enfield, Eicher Motors, barely owns three per cent of India's motorcycles market, but they almost completely dominate most segments it operates in. It does have a big advantage, its 350-500cc cruiser motorcycles are unique in India where the market is dominated by smaller capacity bikes around the 100cc mark as well as slightly larger sportsbikes.
Royal Enfield’s motorcycles however, are heavier, offer a vintage feel with a modern touch and in a similar vein of Harley-Davidson, their bikes enjoy a distinctive engine sound. Everyone knows we bikers love the smell and sound of our favorite ride.
If the sheer quantity of motorcycles currently built by Royal Enfield are making reader’s mind’s boggle, take the following thought onboard, the company wants to build even more motorcycles so they can extend this success worldwide. They announced in their financial reporting in May 2015 plans to manufacture 675,000 motorcycles a year by 2017.
Moving the corporate chess pieces across the worldwide motorcycle board, Royal Enfield have increased the number of dealerships to over 500 in India and started selling motorcycles in Colombia, which they feel could become the largest market outside its home base. It also has plans to move into Thailand and Indonesia, the latter of which is considered the third largest volume motorcycle market in the world.
It doesn’t appear Royal Enfield will be standing still on its motorcycle technology. The company acquired Harris Performance, a motorcycle engineering and design firm based in UK in May 2015 and are building Research and Development (R&D) centers in Chennai, Tamil Nadu as well as in Leicester, UK.
The UK R&D center will be operational by late 2016 while the Chennai center will be operational by 2017. With all this investment, it’s fair to assume Royal Enfield will enjoy the same leaps in motorcycle technology Triumph motorcycles experienced with its overhaul to the iconic British line unveiled in late 2015.
Go West Young Man
Aside from reading the foreign press or Royal Enfield’s financial statements, the first inkling of this new worldwide drive came to the US when the company decided to directly distribute its motorcycles in the North American market. Taking direct control of distribution isn’t an unusual move and was seen recently with Harley-Davidson assuming the role of distributing its own motorcycles throughout Canada.
Considering this a strategic move, Royal Enfield notes it’s in line with the company’s international focus on leading and expanding the global mid-sized motorcycle segment (250-750cc), with North America representing a priority market for the company.
"Royal Enfield has been growing at over 50% year-on-year for the last five years. With a proven business model, today we are one of the largest mid-size motorcycle manufacturers in the world. With our increased efficiencies and scale of manufacturing we are strategically positioned to make effective business inroads within international markets, including the United States," said Mr. Rudratej Singh, president, Royal Enfield.
For the 15 years prior, its motorcycles were distributed in the U.S. by Classic Motor Works (CMW) out of Fairbault, Minnesota. As of January 1st, 2016 however, Royal Enfield took over that distribution with a newly formed North American division, led by an executive team and senior leadership with deep motorcycle category experience.
As of the beginning of the year, this team took over operations, marketing, communications, sales, warranty, service, dealership development and finance for the company across the U.S. and Canada. This new division, Royal Enfield North America (RENA), opened its headquarters in Milwaukee, Wisconsin.
“Milwaukee is the epicenter of motorcycling in the U.S., making it the optimal location for our headquarters,” said Rod Copes, president of RENA.
As a side note, if all these similarities between Harley-Davidson and Royal Enfield are catching the eye of some readers, here’s another one, Rod Copes is a former Harley-Davidson executive.
Royal Enfield Bullet G5 Deluxe
However, changing this long list of responsibilities from an independent distributor to Royal Enfield’s new North American division isn’t as easy as handing over a stack previously signed agreements or address book full of existing dealer’s names and addresses. Clutch and Chrome met with Royal Enfield’s Ryan Hoffins, Vice President Marketing, North America and Bree Poland, Social Media and Digital Marketing Manager, North America in March 2016 at Daytona Bike Week. They detailed the various challenges faced by Royal Enfield, both with the increased production goals as well as being given the company keys to the North American motorcycle market.
Regardless of what's being made, every manufacturer has standards on how their product is represented by the company selling to the general public. Financial soundness, what other products they sell and customer satisfaction are all areas manufacturers can consider before allowing another company to essentially represent them to the final owner of their product. Add to this kind of review the licensing required to manage the distribution of its motorcycles and you have a huge task of establishing Royal Enfield’s North American dealership network under this new division.
Did we mention, the licensing needs to be approved state by state?
To show how time-consuming the process can be, as of March Royal Enfield had received licensing approval for sixteen states which allows the manufacturer to sell motorcycles in those states.
“I think the big misconception the public is having right now is that we just don’t want to sell in every state,” explained Bree Poland, Social Media and Digital Marketing Manager, North America, “That’s completely wrong we want to sell in every state. We want to have multiple dealers in every state, multi-line dealers [and] standalone dealers, but it takes a while.”
Royal Enfield plans on having at least one hundred dealers in the United States. In addition to the sixteen approved at the time of the interview, a further twenty-four are currently in the application process awaiting approval. There’s great news for Enfield fans north of the border, twelve dealers are ready to come on board when the company gets the needed licensing to distribute their motorcycles in Canada.
Clutch and Chrome makes an effort to report on the latest approved dealers, but readers wanting to know the very latest on that front should be a regular visitor to Royal Enfield’s North American Facebook page. Every time a new dealer is fully approved, they are featured on there.
For riders who may be curious about Royal Enfield and experience the motorcycles first-hand, hold onto your helmets. Our interview with Bree and Royal Enfield took place at a ‘traditional’ donut shop off the main drag in Daytona Beach called Donnies Donuts. They had the range of motorcycles parked outside and a store full of free donuts and coffee inside for bikers and non-bikers alike.
This, both Bree and Ryan explained, will be the sort of things riders should look for as the new division markets the classic motorcycle.
‘We are busy building a great events calendar that will see us on the road throughout the next six months,’ Poland wrote in an email at the beginning of May, ‘We have a few cool initiatives we are launching very soon so anyone interested should follow us on FB!’
The quality of Royal Enfield’s product was something Ryan Hoffins discussed. Noting some of the finishing touches of the motorcycles being built are still completed by hand, by workers who have done the same job for decades no less, the motorcycle manufacturer have no intentions of sacrificing what Enfields have come to be known for to meet those large production goals.
‘Quality is key,’ he notes.
The Road Forward
Throughout the time spent with the Royal Enfield staff, both on and off camera, it was apparent there was a passion for the style of motorcycle Royal Enfield wants to see more of on the streets of America. Between this passion and confidence to bring the unique motorcycle brand to not only the United States but many parts of the world, riders should keep a close eye on Royal Enfield.
The most immediate example of this is the first addition to the classic Royal Enfield line in a while, the new Himalayan.
A motorcycle that would fit into the adventure or enduro category, the Himalayan is purpose-built for adventure and touring in the Himalayas. Bringing together 60 years of Himalayan riding experiences in a completely ground-up design, and powered by a new LS 410 engine, the Royal Enfield Himalayan paves the way for a purer, non-extreme and more accessible form of adventure touring.
‘In fact’, notes Royal Enfield, ‘it’s extremely capable off-road capabilities make it adept for riding though potholed urban jungles as it does for treacherous mountain trails.’
The latest motorcycle from Royal Enfield, the Himalayan
“Himalayan is the culmination of Royal Enfield‘s 60 years of enduring history in its spiritual home, the Himalayas.” Mr Siddhartha Lal, MD & CEO, Eicher Motors Ltd. said, “Our single biggest insight in all these years of riding has been that the best motorcycle for the Himalayas is not one that tries to dominate its landscape, but one that is able to go with its flow. Large adventure tourers that currently define this category, do not fare well in the Himalayas as they are very heavy, extremely complicated, intimidating and not really designed for this environment.”
Showing Royal Enfield is already enjoying its recent acquisitions, the Himalayan is built on a rugged duplex split cradle frame designed and developed by Harris Performance, allowing the Himalayan to be stable and agile in equal parts. A strong mono shock rear suspension with linkage allows for longer travel and delivers a smoother ride experience regardless of terrain. The Himalayan’s 220 mm ground clearance ensures it ‘gobbles up’ obstacles comfortably be it in the Himalayas, rocky river beds or at stream crossings. An optimal wheel size combination allows for better control while riding over rocks and ruts.
The Himalayan is powered by a completely new and evolved overhead camshaft engine platform that forms the base for its new long stroke LS 410 engine. The all new engine delivers high torque and usable power at lower RPMs. This makes for smooth riding in higher gears at lower speeds, making it easy to climb hills or to maneuver through traffic. Modern design and materials of the engine translate to increased efficiency and low maintenance, and the engine can go 10,000 kilometers between oil changes.
Along with other items we discussed during the interview, more information and a look at the Himalayan is featured in the video below. Our interview with Bree Poland starts at 29 minutes in with the Himalayan riding onscreen at 34’39”.
Currently this model isn’t available in the United States. But according Bree Poland, it doesn’t necessarily need to be that way and could be brought to the American market.
“We need to create a need for it [Himalayan], we need to get the public excited” explained Bree, “The more emails and comments I get on Facebook and social media, the better chance there is for me to bring it over here.”
This ‘out-of’the-box’ thinking, the corporate enthusiasm and Royal Enfield’s motorcycle ambitions are coming together to make this segment and style of bike an interesting part of the two-wheeled world. More importantly, all this effort could change any questions American riders ask from ‘Who?’ to ‘When?’