The Indian Truckmaker That Got Hotter Than Tesla Selling Bikes
It’s no secret that Elon Musk’s Tesla Inc. is a Wall Street darling. Then there’s India’s Eicher Motors Ltd.
Best known for its Royal Enfield brand of motorcycles common across India and occasionally seen in Miami or Los Angeles, Eicher over the past seven years – since the time that Tesla has gone public – has produced superior returns for investors.
The stock has appreciated 3,270 percent, much higher than Tesla’s 1,533 percent gains since the electric carmaker’s listing in mid-2010.
The oldest running motorcycle brand in the world, Royal Enfield is popular for its World War-era military motorbike looks. Originally British, Eicher Motors acquired it in early 1990s.
Chief Executive Officer Siddhartha Lal is credited with reviving the iconic brand as sales surged more than tenfold in the last seven years. It now accounts for a quarter of the motorcycles with engine capacity of over 150cc sold in India.
The company has successfully created a niche for its bikes in the premium segment and gained “mindshare” of the customers, Bharat Gianani of brokerage Sharekhan, a subsidiary of BNP Paribas, said.
Royal Enfield bikes “stand for sturdiness and comfort in long drives, thus creating a strong brand in the leisure biking segment,” Gianani told BloombergQuint through an emailed statement.
Newer offerings like the Thunderbird cruiser, Continental GT cafe racer and the adventure tourer Himalayan have helped them target young and women riders, Gianani said. But the Classic 350 and the Bullet, two of its oldest offerings, remain prime bread earners.
Another key factor was Eicher rectifying the long-standing product faults such as oil leakages, and a “vast improvement in after-sales experience”, Gianani said. Eicher revamped Royal Enfield retail stores in 2015, and introduced a complete range of branded apparel, accessories, and riding gear.
It’s expanding its international footprint and has exclusive stores in over 13 countries. Royal Enfield also showcased the Interceptor 650 and Continental GT 650, two of its most powerful motorcycles yet, in the Milan auto show earlier this month.