CONSUMER PERCEPTION PART-A 1.INDUSTRY PROFILE THE FIRST MOTORCYCLE We are going to begin by looking at the first bikes. They didn’t work very well and they were not very fast but moved with being drawn by a horse or being pedalled. When you look at a motorcycle today, have you ever thought what the old bikes were like? Were they easy to ride? How fast did they go? Were they comfortable? To answer all these questions, we have got to go quite a long way back say about 100 years. The world was very different in those days and there must have been a feeling of great excitement. There was a great interest in science and engineering and almost every week, some fantastic new invention appeared. First there were gaslights and then electricity and new cures for many kinds of illnesses were always being announced this was period when people started thinking about how to travel quickly and safely. Before cars and bikes, the quickest mode of travelling was steam trains. And if there was a near to where you wanted to go then the next best thing was a stagecoach or paddle streamer. No one, except the very rich, could get from their own house to where they were going very quickly. Then in 1885, a German called Gottlieb Daimler RNS ISTITUTE OF TECHNOLOGY 1
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PART-A
1.INDUSTRY PROFILE
THE FIRST MOTORCYCLE
We are going to begin by looking at the first bikes. They didn’t work very well
and they were not very fast but moved with being drawn by a horse or being pedalled.
When you look at a motorcycle today, have you ever thought what the old bikes
were like? Were they easy to ride? How fast did they go? Were they comfortable?
To answer all these questions, we have got to go quite a long way back say about
100 years. The world was very different in those days and there must have been a
feeling of great excitement. There was a great interest in science and engineering and
almost every week, some fantastic new invention appeared. First there were gaslights
and then electricity and new cures for many kinds of illnesses were always being
announced this was period when people started thinking about how to travel quickly
and safely.
Before cars and bikes, the quickest mode of travelling was steam trains. And if
there was a near to where you wanted to go then the next best thing was a stagecoach or
paddle streamer. No one, except the very rich, could get from their own house to where
they were going very quickly. Then in 1885, a German called Gottlieb Daimler made a
small engine, which ran on a kind of petrol. It wasn’t a very good engine but it just
worked. Daimler fitted the engine to a cycle type frame, which exactly had one wheel at
the front and two wheels at the rear.
In the following year, another German, Wilhelm Maybach rode the Daimler bike
for a few meters- something which everyone thought was very brave. At last, a way of
moving people directly from one place to another had been invented.
Not everybody thought that this was a good idea. In England there was a law,
which said that no vehicle powered by an engine could go faster than 4mph which is
about as fast a s you walk. Many of the people were afraid and urged that the bike
should be banned. But in 1896 an act was passed that bikes can travel 12mph speed-,
which is considered to be a fantastic speed.
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At the same time, a French engineer called De Dion made the first real good
engine for motorcycle and soon everyone was having a try at making complete
machine. And this was the turning point where bike started getting its actual look many
ideas poured in and were given shapes also.
THE BRITISH BIKES
Today we won’t see many British bikes on the road but most of the older bikes
were make in Great Britain, which had its name and fame. Now we see very few of
British Bikes. What went wrong?
In 1900, bikes were not very good. They were hard to start, they had poor brakes
and did not have much power but everyone thought they were marvellous. For the first
time, person could have his own individual way of getting about. He had personal
transport, which he could use the moment he wanted to. Above all else, these first
motorcyclists felt the sense of freedom, which a bike gave them.
The motorcycle manufacturers felt the same excitement. New designs appeared
almost every day. Some were excellent and others silly but each factory learnt from
others and bikes got better and better in just a few years.
Then the First World War came in1914, and the whole world changed. Bikes
made in this first period, from 1885 until the end of 1914 are called veterans and the
riders who are reliving how the first motorcyclists rode are still using many today.
When the war came, the bikes went with the army. The fastest way to carry an
urgent message was to send through a good rider on a bike. Here again a bike had a
turning point and during this period bikes got opportunity to claim its stake in the
market. It was considered to be best mode of travelling from remote area to urban and
from plains to rough terrain. Where a horse rider could not think of moving, their bikes
were able to do so. Moreover, a horse rider and horse would take rest after certain
interval of travelling, the bikes did not require since it was a machine.
One such British Bike, which actually made its appearance in the scenario, was
Royal Enfield and was produced in 1931 with four valve system. The name of the bike
was given in 1932 with a suitable name of bullet
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which exactly had a good resemblance of the today’s bike. In other words t he
modern bikes have come into shape shown by Royal Enfield.
In 1948, the first 350-bullet roadster was introduced. Although it was a new
motorcycle with many design innovations. It was the first British produced, which had a
rear swing arm. It also had an oil filter and alloy primary chain case.
THE PROFILE OF TWO WHEELER INDUSTRY IN INDIA
Introduction
The feeling of freedom and being one with the Nature comes only from riding a
two wheeler. Indians prefer the two wheelers because of their small manageable size,
low maintenance, and pricing and easy loan repayments. Indian streets are full of people
of all age groups riding a two wheeler. Motorized two wheelers are seen as a symbol of
status by the populace. Thus, in India, we would see swanky four wheels jostling with
our ever reliable and sturdy steed: the 2 wheeler
Recent Economic Developments
India is the 2nd largest two-wheeler market in the world with a size of over Rs
100,000 mn. Steps like abolition of licensing, removal of quantitative restrictions and
initiatives to bring the policy framework in consonance with WTO requirements have
set the industry in a progressive track. Removal of the restrictive environment has
helped restructuring, and enabled industry to absorb new technologies, aligning itself
with the global development and also to realize its potential in the country.
The liberalization policies have led to continuous increase in competition which
has ultimately resulted in modernization in line with the global standards as well as in
substantial cut in prices. Aggressive marketing by the auto finance companies have also
played a significant role in boosting automobile demand, especially from the population
in the middle income group.
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Nature of market
In the initial years, entry of firms, capacity expansion, choice of products
including capacity mix and technology, all critical areas of functioning of an industry,
were effectively controlled by the State machinery.
However, the major set of reforms was launched in the year 1991 in response to
the major macroeconomic crisis faced by the economy. The industrial policies shifted
from a regime of regulation and tight control to a more liberalized and competitive era.
Two major results of policy changes during these years in two-wheeler industry were
that the, weaker players died out giving way to the new entrants and superior products
and a sizeable increase in number of brands entered the market that compelled the firms
to compete on the basis of product attributes
Key players in the Two-wheeler Industry:
There are many two-wheeler manufacturers in India. Major players in the 2-wheeler
industry are Hero Honda Motors Ltd (HHML), Bajaj Auto Ltd (Bajaj Auto) and TVS
Motor Company Ltd (TVS).
The other key players in the two-wheeler industry are Kinetic Motor Company Ltd
front mudguard. Forks modified. Oval oil pump cover plates on 500cc. 30cc got larger,
re-shaped 3.75-gallon gas tank, chain enclosure and larger, wider seven-inch front brake
(the 500 retained its six inch twin drum brake). New stylish gas
tank, trials model gets heavier fly wheels, and exhaust is tucked away, but
continues with magneto.
1960: huge, one –piece alloy cylinder head (big head) casting plus new, larger
‘chunky’ tank for 500. This is also the engine design used for the India Enfield bullet,
coil ignition is introduced.
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The Royal Enfield fury, produced at this time for the US market, is essentially the
same bike as the Bullet (both 350 and 500cc models), capable of reaching the 100 mph
mark (a f 350cc Enfield tuned by Steve Lindsell in the late 1970s reached 95.64 mph).
It deferred from the bullet by having a the bullets iron and a higher compression piston
(8:9:1 instead of 7:3:1 ). It also had a flange for mounting an optional rev counter, an 18
– inch rear and 19-inch front wheel. Between 1959 and 1963,only 191 machines were
made.
The 500cc boasted a 40bhp output, up from the UK models production of 27bhp.
A 600cc model was also made for a short period.
1961: detachable end – cap fishtail silencer, trials model discontinued except by
special order.
1962: deeper rear mudguard. Both 350 and 500 models discontinued. The UK
Company was sold in 1962 and the bullet line discontinued. Enfield India continued to
churn out bullets just the way they were made in England in 1955. Forty years later they
still do, with a few minor modifications (signal lights, a 28m Mikuni card, 12-volt
electric’s a better bench seat and in 1990. twin leading – shoe
brakes). While not the largest motorcycle manufacturer in India (they rank about
third, producing around 18,500 bikes a year but have plans to increase that to 25,000)
they are one of its oldest. Initial attempts to import 350 bullets into the UK in the
1970’s (by the Slater brother and later Evesham motorcycles – according to
one source the actual date of the first re-introduction was 1977), were
unsuccessful. The bike wasn’t up to par and the exchange r ate wasn’t very good. So
they were not as inexpensive as they are today. The Indian company had little interest in
making changes the few sales exports could garner.
In 1986, Raja Narayanan, a UK civil servant, returned to his home in India and
started an export farm for the company to bring the bullet back into England. He got his
first 350 into England that year. He was responsible for many of the production change
that
improved sales and quality over the years. He responsible for many of the
production changes that improved sales & quality over the years. It was the prodigal
son returning home.
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The bike appeared in UK motorcycle shows in 1989 and at the classic bike show
in Stafford in 1990. Canada started importing them three years ago, and the US in 1995.
Twenty countries now import them. In late 1995, the Indian firm finally acquired
the name Royal Enfield as their own. The Canadian importer started putting the new
decals on the tank in early 1996. Recently Swiss engineer fritz Egli has been working
with Enfield to improve production for exports models. He also designed performance
improvements for his own retail sales bullets and has been discussing a five-speed
transmission with the company. He designed a 535cc version, which produces 45bhp
and 624cc racer (47c.bhp with a top speed to 160dph, 100 mph neither one has made it
to North America….yet).
CLOSEOUT IN UK
Royal Enfield UK continued manufacturing motorcycles and came out with some
more innovative and powerful machines notably the Royal Enfield Meteor,
Constellation and finally the Interceptor 700, before being sold to Norton-Triumph-
Villiers (NVT) in 1968. Production ceased in 1970 and the company was dissolved in
1971. Remaining tooling and equipment of the Redditch works were auctioned off.
Meanwhile the Bullet 350 continued to be manufactured in India and by the
1980ӳ the motorcycles were even exported to Europe out of India. Even after the
motorcycle manufacturing closed down the precision engineering division ran for some
more time and even bicycles were produced until quite late.
THE EICHER CHAPTER
In 1990, Enfield India entered into a strategic alliance with the Eicher Group, and
later merged with it in 1994. It was during this merger that the name Enfield India
changed to Royal Enfield. The Eicher Group is one of India's leading automotive
groups with diversified interests in the manufacture of Tractors, Commercial Vehicles,
Automotive Gears, Exports, Garments, Management Consultancy and Motorcycles.
Since then, the Company has made considerable investments in modernizing its
manufacturing technology and systems.
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In 1996, when the Government decided to impose stringent norms for emission
Royal Enfield was the first motorcycle manufacturer to comply, a tradition which has
stuck on thus making emission norms being one of the most important factors the
company focuses on. Royal Enfield is amongst the first few Indian companies to obtain
the WVTA (Whole Vehicle Type Approval) for meeting the European Community
norms.
INFRASTRUCTURE AND TECHNOLOGY
To manufacture quality bikes that are well known worldwide for their reliability
and toughness state-of-the-art infrastructure is required, and that is just what Royal
Enfield has done at their Chennai manufacturing facility. An active in-house Research
& Development wing is constantly at work to meet changing customer preferences and
the challenges of Indian and International environment standards. When introducing a
new product, this team undertakes all related planning which includes a rigorous
customer contact program, design, concurrent engineering and testing processes. The
Motorcycle Design team at Royal Enfield is well equipped with high-end CAD/CAM
workstations and the latest modelling software. Top-notch designers work continuously
to come up with innovative bikes designs to meet the market expectations. Continuous
rigorous testing of motorcycles and components is carried out in the Product
Development testing lab to come up with more improvements in enhancing the
customer experience
MANUFACTURING
Royal Enfield's manufacturing operations go through a series of modernization
and improvement efforts, with a number of automated processes. The Company has put
in place modern manufacturing practices like Cellular layouts, Statistical process
controls and Flexible manufacturing systems.
The Chennai manufacturing facility has received the ISO 9001 certification and
for managing its operations in a clean and safe environment, it has obtained the ISO
14001-quality certification and kaizens are implemented to ensure the quality levels are
kept at an ever rising pace.
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Royal Enfield ensures that all the components used in the bikes are sourced from
the best vendors in the Indian automotive industry, who are geared to supply according
to the Company’s stringent quality standards.
The company works closely with all of its suppliers, giving them technical and
managerial support while maintaining practices like Direct-On-Line and Vendor Self-
Certification.
MARKETING NETWORK
You can feel the pulse of your customers, only if you get close to them. This
thought process has driven Royal Enfield to set up has a wide network of 11 Brand
Stores, 180 dealers in all major cities and towns, and over 100 Authorized Service
Centre. The Company also exports motorcycles to 42 countries like the USA, Japan,
UAE, Korea, Bahrain, UK, France, Germany, Argentina and many other countries
through 40 importers and over 300 dealers across the globe
ROYAL ENFIELD REVVING UP
With the finest and brightest of teams in the country, comprising of management
professionals and a skilful, committed workforce, the Company has a unique and open
culture, making Royal Enfield a vibrant and responsive company. To its customers in
India and elsewhere in the world, Royal Enfield means more than just motorcycles; it's
a sense of belonging to an exclusive community with unfading passion, emotion and
interest.
As the only motorcycle manufactured in India synonymous with adventure and
leisure riding, Royal Enfield has more recently stayed away from regular mass media
advertising and has concentrated more on building its brand around the values that the
brand stands for. Having a Cult status the Royal Enfield motorcycle is known for its
Versatility, Uniqueness and is built to last. Perceived as a machine in a class of its own
and synonymous with Leisure and Adventure; riding and charting up the miles.
Royal Enfield strongly promotes leisure motorcycling as a lifestyle and
encourages the Royal Enfield riders/owners to keep riding. In this regard, the company
organizes annual events and rides such as the Himalayan Odyssey, The Tour of Rann of
Kutch, The Tour of NH 17 (Mumbai to Goa)
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The Tour of Rajasthan and the Southern Odyssey. It also organizes the Annual
festival of biking, Rider Mania in Goa which attracts Royal Enfield riders from all over.
AWARDS AND ACCOLADES:
- Apollo Auto India Awards 2010: Best Brand
- Zigwheels.com Viewers Choice Bike of the Year 2009
- Zigwheels.com Bike of the Year above 251cc
- NDTV Profit Car & Bike Awards 2010,2012-13: Motorcycle of the Year above 250 cc.
- NDTV Profit Car & Bike awards 2010,2012-13: Best PR
Communications Team.
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SWOT ANALYSIS
SWOT ANALYSIS of Royal Enfield:
SWOT Analysis
Strength
1. Size and scale of parent company
2. Effective Advertising Capability
3. High emphasis on R and D
4. Established brand name in the cruiser market
5. Established market distribution channel6. Exports motorcycles to 31 countries like the USA, Japan, UAE, Korea, Bahrain, UK, France, Germany, Argentina and many other countries
Weakness
1. Weight of the motor cycle can be an issue for few customers.2. Mileage of high cc bikes is an issue
Opportunity
1.Two-wheeler segment is one of the most growing industries2.Export of bikes is limited i.e. untapped international markets
Threats
1. Strong competition from Indian as well as international brands2. Dependence on government policies and rising fuel prices3. Better public transport will affect two-wheeler sales