“Next time you’re in the UK come and visit us,” said the email from my old friend Siddhartha Lal. That’s him in the picture, and like most of my friends he is usually found in a t-shirt with a motorcycle splashed on it, sneakers, torn jeans and way too much facial hair. Unlike most of my friends though his business card says CEO. Sid Lal is not only boss of Royal Enfield but CEO and MD of Eicher Motors, a diversified group that churns out trucks, buses and eight-litre engines (in partnership with Volvo), ATV-based road-going 4-wheelers (with Polaris) and of course the venerable Bullet in all of its variously chromed variants. And here’s Sid Lal, stepping out for a picture during the lunch break of his quarterly review meeting with the board of directors and senior management. I am not making this up. In the picture, is the CEO of a publicly traded company whose share price is hovering around 30,000 rupees!
Sid Lal is Royal Enfield. He defines the culture at India’s oldest motorcycle manufacturer. It was because of him that the Eicher board held off plans to shutter Royal Enfield, giving the then 26-year-old more time to turn it around. That was in 2000. Four years later he was elevated as COO of Eicher Group where he promptly sold off 13 of the 15 businesses the group was involved in. And in less than two decades, in February of this year, Eicher’s market capitalisation (7.48 billion US dollars) overtook that of Harley-Davidson. Royal Enfield also sold more motorcycles than Harley, all fuelled by iterations of one single model that holds the world record for uninterrupted series production (since 1948, though it traces its roots back to the 1932 Bullet). With no demand, the Continental GT stopped production quite some time ago and plagued by problems, the Himalayan has been a damp squib with zero sales over the past three months, pending the upgrade to BS IV norms. That is all set to change when the new bikes developed in the building behind Sid Lal, hit the roads.
UK Tech Centre
Biking enthusiasts will be familiar with the Harris Performance name, the British manufacturer of performance parts that Royal Enfield acquired three years ago. Harris were responsible for the frame of the Himalayan (the best part of the bike, you will all agree), and before that the Continental GT’s frame, but the specialist’s real claim to frame was designing and manufacturing GP and WSBK bikes for the official Yamaha and Suzuki teams. Harris continues to be an independent specialist under the Royal Enfield umbrella but, contrary to what I expected, Royal Enfield’s UK Tech Centre is not an extension of Harris.
This is a brand new facility located at Bruntingthorpe in the Midlands, two hours from Harris, two hours from London, right in the geographical centre of UK, where all the big trucking companies are based for logistical convenience. Royal Enfield’s facility is located inside the Bruntingthorpe proving grounds that is home to a massive WWII era airstrip that’s now extensively used for manufacturer testing (a Triumph was belting down at impressive speed when I was taken on tour), specialist automotive outfits, refurbishment garages for tens of thousands of used cars, and facilities for stripping down massive old airplanes. It’s a freaky facility.
Over a working lunch Sid Lal tells me: “If we wanted to attract the right chaps from the UK we had to be here. We had quite a few locations but here we get immediate access to test tracks and proving grounds. There’s two levels of security. We are in a bit of a corner doing our own thing. The entire might of the UK Midland’s engineering expertise resides right here and its ecosystem really helps us. You get specialists, you get consultants for this that, it’s all here.”
What’s left unsaid is Triumph is next door and a huge chunk of the workforce have Triumph on their resumes including three of the core group of four that started the UK centre. Simon Warburton, head of product planning and strategy, came from Triumph when construction of the new facility hadn’t even started. “The original plan was on quite a smaller scale and as we looked at what we wanted to do as a company, the plan grew and grew. At the end of January (2015) we moved into a small rented office and put some chairs. We really just started from nothing and started recruiting.”
Adds Simon: “We started actually designing this building back in 2014 but it changed significantly as we brought more people and more viewpoints. We changed the design and grew it and went from looking at upgrading an existing building on this site to, by the middle of 2015, deciding we needed to do a new building that is significantly bigger and better appointed. We finalised the design towards the end of 2015, we started the program in March 2016 and moved here in May of this year. It was a 14-month program. And while all of this was happening, we have been building a team and building our capabilities.”
The UK Tech Centre now has around 100 staffers, a majority of them from the UK but new people have come from Italy, Switzerland, US and Japan. This is not a commercial office, this is purely a centre for product development and all the technical heads – engine, chassis, design, product planning – are based here with teams in Chennai also reporting to them. And Sid Lal tells me, “Already we are sort of thinking ‘Oh shit, we should have made it a lot bigger.’”
First question. What happens at the UK centre? “We work in parallel with the team in Chennai,” says Simon. “We develop new engines and new motorcycles. We have industrial design capabilities, product strategy, powertrain engineering, chassis engineering. We have a head of each function and we have teams in the UK and Chennai. The hundred people here include product strategy and industrial design and some enabling functions while the team size in Chennai is currently about 140. Every engine we develop has some amount of UK and Chennai working together. Although some of the engines are headquartered in UK, the transmission and exhaust are done in Chennai, and even the engine teams that are headquartered in Chennai still have James in charge.”
James Young, also from Triumph, is head of engines and employee number one who worked out of his kitchen till the UK tech centre came on stream. Now he not only has two teams in the UK and two in Chennai but to complement the tech centre’s facilities there’s a new engine dyno room receiving finishing touches just behind the main building. “The main challenge for Indian manufacturers is going to be the introduction of BS VI (emission norms). Most bikes run carburettors whereas the rest of the world it’s fuel injection so that’s going to be a big shift.” I ask if the current range can meet BS VI norms with carburettors. James looks around, smiles, wonders how to sugar coat it and replies: “No.”
I ask about the Himalayan’s engine, inexplicably carburetted despite it being a new motor and one whose BS IV version has yet to hit showrooms, to which James replies, “When I started that was pretty much all over.” James’ baby is the new twin-cylinder motor that is just around the corner. But obviously he cannot say anything about all those bikes I saw lurking under dust covers so let’s move on to Jon.
Jon Bennett is the head of chassis and like Simon and James, has teams in Chennai and UK reporting to him. “In terms of UK projects, we have two main projects at the moment. And in India we have one main project with an additional project that will come online within the next few months. We generally work on a three-year time plan for our projects.” After this story is out I suspect Jon will be sent for a spot of media training.
“The project that we have, which you are probably aware of because of pictures in press, is imminent. We are in the final test and development phase and running quite a lot of bikes in the UK and in India.” At which points Simon interjects lest they both be sent for media training. “All of our products are global products. We test on different road conditions. Obviously roads and traffic is worse in India. And here in the UK the roads are open and faster.”
Jon chips in. “We do a lot of mileage tests for motorcycles in the UK because it is reasonably quick, we can ride faster and have much more open roads. In India it takes much longer. It is a very different riding condition, a lot hotter, dirtier, dustier and slower. We do run this dual programme where we develop all products for Indian and India-like markets in India, and all products for Europe and Europe-like products in the UK.”
I ask Jon what he thinks of the Chennai-based engineers. “The chaps in India have had less exposure to motorcycle development than the chaps in Europe. Many of them don’t have exposure to larger and more powerful motorcycles. There are different sets of challenges as motorcycles get faster and those guys would never have been exposed to those challenges, doing motorcycles that don’t go above 70 miles an hour (110kmph). Not being exposed to that you don’t know what is coming and that’s part of the reason for establishing this centre. To become a truly global manufacturer.”
It’s on the chassis development side that Harris Performance now comes into the picture. Sid Lal explains: “We use Harris as a special chassis development arm of this tech centre. When we have issues in some chassis development, we bring in Harris and he (Steve Harris) gives us some new ideas. But their speciality is in making, amongst other things of course, an adjustable mule. They do that brilliantly – a bike where you can change the headstock angle and all sorts of different parameters, maybe 15-20 of the important chassis parameters. They design it so that you can change 1mm, 1mm 1mm, 1 degree, 1 degree, 1 degree. So while testing you can keep changing, changing, changing until you hit the right combination.
“If you see the Harris guys, their hands are all blistered. You don’t get that in India. They are blue-collar specialists, extreme specialists. They know how to work with their hands. Their understanding of custom frames, of how to make it, that’s what special. They come in and they’ll be like okay did you try that, did you try this … you know, trouble shooting. We’re putting huge amount of energy in just having a good rideable motorcycle. It’s simple stuff in the end but it takes quite a bit to get there and we’re learning a lot.” The last part of the motorcycle development (or is it the first part?) is design and we walk down to the industrial design studio where styling work on the new range of bikes is being done. This is Mark Wells’ den and his association with Royal Enfield goes back decades.
“Royal Enfield gave us our first break and we’ve worked on a number of different projects with them. We worked with Shiva (head of industrial design in India) and his team on the Classics. In fact, his first day at Royal Enfield was my first visit to India, which would have been 2003. And obviously we have seen a huge amount of change over that time. We also worked with Royal Enfield on the (Continental) GT – it started out as a little sketch which we sent over and heard nothing and then they came back about a year later and said let’s explore it a bit further and that’s kind of how the GT started.”
Mark was one of the people instrumental in getting the UK tech centre off the ground, his work with different manufacturers putting him in touch with James and Jon who he then connected with Royal Enfield. In 2014, Mark and his business partner Ian, left their design Xenophya to work for Royal Enfield full time. “The thing that pushed that decision is the potential within the brand,” says Mark. “I think this brand has the most potential in the world, a brand that has 100 years of heritage. We have been around since 1901 and that continual manufacturing lineage exists.”
Mark is lucid, articulate and talks much faster than the bikes he designs so I’ll not interrupt him. “Royal Enfield has the benefit of scale. The economies of scale come with larger volumes so if you’re making lots of motorcycles, your tolling cost can be amortised over a much faster period and your part prices can be much cheaper. Our competitors, other brands in Western Europe, don’t have that advantage. They’re not manufacturing in those volumes so it changes the design process, it changes how you think about design. It means that we can do things that our competitors in Western Europe can’t do. Everybody in Western Europe, your Harleys, KTMs, Ducatis, Triumphs are trying to get into India. They see the volume, they see the potential but they don’t have the manufacturing capability, the supplier network, the regional distribution, the market penetration, the brand awareness. Some are building it some are getting there, but they’re not there. Whereas Royal Enfield does, Royal Enfield has 50 years of heritage in India.
“The other thing that we have that none of the brands in India have, the Bajaj’s, Hero’s and TVS’s don’t have a brand that resonates and allows them to go to the UK or the United States. They don’t have that nostalgic echo. Here, you ride up on a GT and people will say, ‘Oh I remember Royal Enfield’. There’s this warmth in people’s hearts towards the brand and that’s something that’s unique to Royal Enfield”.
Mark is chatting with me in his industrial design studio, a vast space that starts with a photo booth with an infinity wall in one corner to take studio pictures of their bikes, either for review or even to send out to the press. In one corner are a dozen or so workstations for the designers, in a space that’s so huge it’s like they’re sitting in a corner of a warehouse. On the floor are mood boards, pictures the designers use to get inspiration. There’s a concept bike or two parked around, either for inspiration or to give the space character. A Himalayan has accessories mocked up on it. Some cool helmets pepper a display case. It’s also a functional space with a milling machine to carve out 1:1-scale clay models, an open-air viewing gallery, “because you have to review everything in natural light” and direct backdoor access to the prototyping and electrical workshops.
Those workshops are crammed with the new twin-cylinder Royal Enfield whose launch is weeks away. Funny story: on arriving at the tech centre I was sequestered into a conference room, the blinds were rolled shut, and a message broadcast to every staffer’s computer to cover up everything. I was, actually still am, the only journalist to have visited the facility, in effect giving them a mock drill for when Royal Enfield does their formal media visit later this year. Of course I did catch more than a few glimpses of that much-awaited motorcycle, even cottoned on to its name after one of the vintage bikes parked in the foyer was quietly wheeled away after I arrived, but revealing information divulged under strict confidence is not how your correspondent rolls. What I can tell you is, despite the well-documented troubles around Royal Enfield’s new bikes, the future is bright. The depth of engineering and design talent that Siddhartha has packed into the technical centre, backed up by an even bigger facility back home in India, does inspire confidence. Sid’s humility also inspires confidence – despite growing exports he remains grounded, still firmly believes Royal Enfield’s core audience is and will continue to remain in India. You can take that as assurance that their twin cylinder bike (bikes actually, there’s a range of them) will not rival Harley’s in either size or price. Customers in India are still front and centre, the only difference being the engineering is now led by individuals with experience of larger capacity motorcycles.
Oh, I can also tell you one more thing. If, when Sid Lal was 30, you had invested the cost of a Bullet into Eicher shares, you’d now be sitting on over 12 crore rupees. I never bought any Eicher shares. Tells you how much I trust I place in my friends.