The above data on commercial vehicle would be more informative if I could include the industry growth figures. That would help to get idea about market share change for Eicher. If any one has data or info on how to go about finding it, please help.
**Here is a recent interview of Mr. Lal:
**
You launched the Continental GT for the international market in September. How has the response been?
We have started customer delivery in a few of the larger markets in Europe and the US. Australia and Japan are next. We have got a very good response. The orders we have received are much more than we had anticipated.
The launch of Continental GT based on the Cafe Racer concept in the UK seems to be a different approach to woo the international markets. Is this a new strategy of the company?
September was the point when we shifted our entire approach to global motorcycling. Until now we were more opportunistic though we weren’t embedded in many countries. Our approach is changing. When I say strategic, I mean our pricing, our distribution, our promotion are more carefully planned. And, we’ll be represented by our people in those markets. We are going to do whatever it takes to be a big player in that market. The first (of such) markets we are ambitious about is Latin America.
We want to be number 1 or number 2 in every market in the mid-size category (250 to 750 cc). We want to be a significant motorcycle player and we want to grow the size of the market we enter. We have a decent distribution network in the developed markets. We believe the future in terms of scale will come from the developing markets… Wherever we go, our focus will be on quality and depth instead of merely adding more countries.
You have launched the Continental GT in India at an attractive price. It is a unique concept. Will it work?
For us, it is really about the types of motorcycles we make. Cafe Racing was the natural extension. We also saw people enjoying sporty bikes. This has been the trend since the start of motorcycling. In our opinion, the (demand for) sporty bikes has peaked. Because of the peculiar demography and the ecosystem, people are willing to step back and have different sort of fun. It is not about extreme performance culture alone.
Is Continental GT the beginning? Are more new generation products lined up?
We are working on many new projects… The idea is to serve the mid-size market. We are certainly exploring new models and we have a solid product plan ready till 2020. It will involve other platforms, but these are in the future. We have developed in-house capability to design products from scratch. We are constantly learning the art of developing engines. Now we have developed a full new chassis, which is state-of-the-art. We have the confidence to develop in-house design capabilities.
Is this the transformation of Enfield in India?
We are just getting started, the best is yet to come. Our business model works. On margins, we are among the most profitable automotive companies in the world.
You have been growing over 50% in the last three years. Any plan to increase capacity?
Our paint lines, engine machining lines are running in three shifts and some of the assembly lines, which are labour-intensive, are running on two shifts, because we have added more capacity recently. The bottleneck is at the suppliers end. When we had announced our new plant in 2012, we planned to make 1,50,000 units. We were able to increase that to 1,75,000 in 2013. We may exceed that number. In 2014, our capacity will reach 2,50,000 units. We are already seeing demand far exceeding that potential.
With the addition of capacity, will the waiting period reduce?
It is difficult to forecast what the demand would be. Our supply chain and operation is doing what it can to deliver more bikes. We have tested it in certain cities, just to see what the real demand is. We reduced the waiting period in one of the cities by supplying more bikes. We saw that the fallout rate was 15-20%, which is the number of people who would have bought our bikes, but are not buying due to the waiting period. This shows the latent demand we have out there.
Anoop Prakash, head of Harley Davidson India, recently said all Royal Enfield users are his future prospective customers. As more alternatives emerge in the market, how do you plan to keep the Royal Enfield customers in your own fold?
We don’t intend to be the only one in the market; we think there is a lot of space for motorcycle manufacturers. There will be many others in the market and they have their own way of operating. We are confident with our approach. So when the market grows, it is going to benefit us as well. The type of motorcycle and type of culture that we have created is extremely different. Our bikes are much more accessible in price or usability. If you have a huge fat ungainly cruiser, it does not work in the normal Indian environment. What I believe ends up happening is that lot of the larger bikes are bought by posers in India. Most of them are people who are not using their bikes, they just want to have something flashy in their garage. Fair enough, we dont want to be in that category at all. We want to have products that begs to be ridden all the time, and our users are riding our bikes everyday. We aren’t complacent on competition front. What we are creating is not a me-too brand; we want to develop our brand in a very different way.
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