Startup Story: How Royal Enfield Created a Motorcycle Empire
Royal Enfield has been around since 1901, when it was founded in Birmingham, England. The company started out manufacturing bicycles and only switched to motorcycles after World War II (1939-1945). By the time India became independent from Great Britain in 1947, Royal Enfield was already one of the leading motorcycle manufacturers in the world, and the company soon decided to focus on the Indian market by building its factory there in 1959.
Founded in 1901, Royal Enfield started out as a munitions manufacturing company. After World War I, the company was forced to diversify due to falling demand for weapons, so it switched to producing motorcycles in 1921. The following year, two of its bikes won an endurance race across Germany—and immediately put Royal Enfield on a path toward becoming one of India’s most iconic brands. While these were all important steps for India’s oldest motorcycle manufacturer, few knew that 50 years later it would be acquiring Ariel and developing its own 250cc bike (the Classic 500) after building engines and gearboxes for numerous foreign companies over six decades.
George B. Simpson (GBS) Joins Royal Enfield
As an engineering student at Cornell University, GBS built bicycles for fun in his spare time. He made a name for himself with his invention of an endless chain, which had numerous uses on bikes but was never patented and never made him any money. Upon graduation in 1913, he went to work as a draftsman at Ithaca Gun Company and started building motorcycles on the side—mostly out of spare parts he found lying around. In 1919, GBS left Ithaca Gun Company to begin selling motorcycles as George B. Simpson Incorporated, changing his company’s name to reflect what people already called him: Geebee. His first bike sold for $125 and featured shaft drive—an innovation that would come to define high-end Royal Enfields.
The Company Goes Public
The company began as an entirely British affair, with its motorbikes marketed under names like Gloria and Excelsior. The founders of Royal Enfield went out of their way to craft motorcycles in keeping with their homeland; they even hired Sir Alec Issigonis to work on their engine designs. But India was a different country then. Its leaders were hungry for international success stories—and they knew that starting from scratch wouldn’t get them far. So, just as Italy had Fiat, Spain had Seat and Britain had Jaguar Land Rover, so too did India have two new motorcycle manufacturers: Bajaj Auto (maker of auto-rickshaws) and TVS Motors (which eventually became maker of mopeds). And both were about to go public!
Expanding International Sales and Distribution
After finding some success selling motorcycles in India, RE started looking for other markets to expand into. The obvious choice was Great Britain, where most of its designs originated and where motorcycle culture had been strong for decades. In addition to tapping into potential sales from British expats around the world, RE figured it could capture market share from one of its largest competitors—Triumph. On top of that, RE figured that Japan’s early foray into selling bikes overseas meant they would have an advantage over more established companies like Harley-Davidson and BMW. But before expanding into other countries (like Japan), RE needed to sort out its domestic business first. One of their biggest problems was getting enough raw materials to produce new models. That’s why RE partnered with Bajaj Auto Ltd., which provided parts for RE’s production lines. This partnership also gave them access to Bajaj’s distribution network, which helped them sell their bikes all across India. They also moved into a new factory in Chennai in order to ramp up production and keep up with demand. Finally, RE made sure that each dealership knew how important customer service was—RE even sent mechanics out on calls with customers if something went wrong with their bike!
Turning Trends Into New Products
If you want to turn trends into new products, start by researching what trends are taking place. If your industry is in constant flux, or if you’re in an industry where an upcoming trend has already been identified and discussed, take advantage of that information. Look at companies already turning these trends into products and model your idea on theirs. (Or just buy their company.) For example, Casper recently turned today’s mattress-in-box craze into one of its own when it started selling mattresses online instead of from brick-and-mortar stores. It turns out that most people really do like buying mattresses online—so much so that Casper became one of 2017’s fastest growing companies in America after only two years in business. You can also use data analysis tools to find out which products have seen sales growth as a result of specific trends. Maybe there’s a way for you to tap into that market without having to reinvent anything. The point here is not necessarily about creating something completely new but about finding ways to make something old better for your customers.
The Golden Era Begins with Thunderbird 350cc in 1955
Anthony Fernandes is an Indian entrepreneur and investor, who is best known as the founder of Tune Air and its sister companies Tune Group, Tune Money, Tune Hotels and Group CEO of AirAsia. On February 2015 Tony Fernandes took over Eicher Motors Private Limited (EMPL) in February 2015. EMPL changes its name to Eicher Polaris Private Limited (EPL) in January 2016. In March 2016 Inox Group sold 100% of EGL’s shareholding to EPL.
The Engineering & Development Team
As part of EPL’s strategy to accelerate and increase market penetration of Royal Enfield in India and globally, EPL acquires Harley-Davidson India Pvt. Ltd. (HDIPL) from Harley-Davidson Inc.
Mary’s Motors Limited, USA Distributor of REBEL/Indian Motorcycles, Set Up in 1960 by Mary Wilson Kemp
Mary’s Motors Ltd. was established in 1960 by Mary Wilson Kemp and her husband Lou, who had been traveling across India on motorcycles for about eight years by that time. They knew there was an American market for Royal Enfields, and started importing them from Madras (now Chennai) to start with. Since then, REBEL/Indian Motorcycles have been through many transformations but never lost sight of their history of developing into one of India’s most successful motorcycle brands along with Piaggio, TVS Motors and Bajaj Auto (Hero MotoCorp). Today it has become synonymous with luxury motorcycles and is available in more than 30 countries worldwide.
LIC Restructures ENPV, Transfers ENPV to Investor Circle Group Inc. (ICG) in December 2014, ICG Changes its Name to Eicher Motors Private Limited
In December 2014, India’s largest public sector undertaking (PSU), Life Insurance Corporation of India (LIC) and its investment arm LIC Housing Finance Limited restructured their debt investments in Eicher Motors Limited and transferred their holdings to ICG (formerly IECC) at a substantial premium. In March 2015, ICG changed its name to Eicher Motors Private Limited. The company informed that it has not been involved in any material transactions during FY 2016-17. It posted a standalone net profit of Rs 6 crore for FY 2016-17 as against Rs 16 crore in FY 2015-16, primarily on account of lower contribution from other income, mainly interest receipts and reversal of provision for uncollectible tax.