Royal Enfield to plug middleweight 'gap'

Royal Enfield's new parallel-twin models, the Interceptor 650 and Continental GT 650, represent a unique proposition that will address and grow a currently underserved motorcycle segment.

That was the sentiment of Royal Enfield CEO, Siddartha Lal (pictured, below), when Bikesales caught up with the company head at the international media launch of the new 650 twins, held recently in Santa Cruz, California.

"At Royal Enfield we really firmly believe there's a gap in market – an enormous gap in middleweights around the world," he said.

"Nobody does middleweights properly, I don't know why. There's a few, but they're a bit sporty, but really people ignore it [the middleweight segment]. There are lots of small bikes, there are lots of lovely big bikes, but there's nothing in the middle. I don't know why that is but we're like, okay, this sounds like a plan – let's fill that gap."

In addressing that perceived gap Royal Enfield has just released its first truly global motorcycle platform, with the Interceptor 650 and Continental GT 650 sharing the same rolling chassis and 648cc, air/oil-cooled, SOHC, parallel-twin.

"It's the first time we've made motorcycles that, from the start, have been made with a global audience in perspective," said Lal.

"What we did was we agreed on a single rolling chassis, we agreed on a single specification for around the world – the highest specification that's required in any market.

"I think it's more than just an important moment for Royal Enfield; I think it's possibly a point for motorcycling itself."

That is because Lal hopes that – with these new models leading the charge – Royal Enfield will be able to replicate its huge success in the domestic Indian market in recent years in western markets.

After parent company Eicher Motors took a controlling share in Royal Enfield India in the 1990s, the firm struggled until, in 2009, it released its Classic 500 and Classic 350 models.

That signalled a major turnaround in the company's fortunes: in the previous decade it had sold a total of under 50,000 motorcycles, but in 2010 it sold 50,000 in the one year.

"That was not bad, but it was 0.1 per cent of the Indian motorcycle market at the time," said Lal.

"Last year, we made and sold 820,000 motorcycles – I get goosebumps every time I say that. It's a 16-fold increase in seven years and it's unprecedented."

That success is down to Royal Enfield's unique proposition, said Lal – a line-up that favours fun, rideability and accessibility for a broad spectrum of riders over a pursuit of outright performance.

"Royal Enfield stands for one thing: it's for simple, old-school, fun motorcycles," he said.

"We don't chase tech-spec numbers – that's a mandate from me to the team. We could certainly have pulled out a few more horsepower for these [new] motorcycles, but it could have been at the cost of low-end torque, it may have been at the cost of rideability.

"For us it's about real-world riding – that's how we've positioned ourselves."

While approximately 96 per cent of the bikes Royal Enfield sold last year were attributed to the domestic Indian market, Lal said it's that momentum that will allow the brand to scale its efforts in other markets – with the new twins spearheading the strategy.

"On the back of the strong home market volumes and scale, it allows us to be a scale manufacturer in this category where one doesn't really exist. So it's a strategic idea that we can build scale in our category, where now it's quite small and fragmented."

According to Royal Enfield's President, Rudy Singh, the new models bring multiple benefits to Royal Enfield's global strategy.

"Around 75,000 to 80,000 Royal Enfield motorcycles are sold per month in India, and what that's done is it's collected about three million owners of Royal Enfields in India already, and a few of them are waiting for something more – that's what the twins have been designed to deliver," he said.

"If you just do the math of three million people, out of which there are many who have been owners of Royal Enfields for three years or longer, the numbers can be staggering. But the business side of things for the twins is also very exciting for mature markets.

"We will grow these markets. We are not here to snatch market share and we are not competing with people; we are saying we will grow the market. In the mature markets like the UK, Europe, Australia, and in many other parts of the world, this will open up the market for more people to enjoy 'pure motorcycling'.

"The third part is there are many more Indias, or types of markets that are commuter markets – like Southeast Asia, like Latin America – where there is a gap in the market for everyday, old-school, evocative, fun and simple motorcycling.

"And so I do believe, if I do say so myself – with some degree of humility but also with a lot of excitement – that we are going to hit that sweet spot as well."

Royal Enfield has been investing heavily in its engineering and design capability in recent years. In early 2017 it opened a purpose-built Technical Centre at Bruntingthorpe Proving Ground in the British Midlands – a state-of-the-art facility now called home by over 140 staff.

A further Technical Centre will open soon in Royal Enfield's home city of Chennai (formerly Madras), India. That will bring a further 250 engineering and design specialists under the one roof.

Royal Enfield's Indian and UK centres integrate to bring a truly international flavour to the manufacturer's capability, with staff hailing from a multitude of nations.

Lal said Royal Enfield's strength, in addition to its people, was down to its focussed attention on its core product.

"I believe that as a brand and as a proposition – the proposition including the product, the character, all of that – I believe that in India we are extremely differentiated, and I believe that in most markets we're quite differentiated," he said.

"That's because there are other brands that may have slightly more modern classics, but they're in a totally different price category. At another level, I will say that they're not committed to the idea [of retro models], because all other brands are spreading their risk in a sense – they say 'We'll also do modern motorcycles, we'll also do traditional ones, we'll do cruisers' – they're not focussed."

It's that focus that, Lal believes, will give it the edge in the global middleweight market – a market it already leads on a global scale, due to its domestic success.

"I think that's our strength but it's also our differentiation, right? In the end we believe it's very important to have a point of view, and that this point of view is different from other people's.

"What this means is that in the market some people will say, 'You know what? I really subscribe to this point of view', and if they do then we're the number-one choice. But if they don't that's fine because they've got so many other people who are giving them other things.

"If you're just a copycat, a 'me too', you're just one of the pack, and people will end up basing their purchasing decision on parameters we don't want to be chosen by, like how many horsepower you have. If that's what you're going to choose then please go and buy something else.

"That's how we're positioning ourselves – let's hope it works!"