United Colours Of Enfield and Kinetic

Royal Enfield Motorcycles is inundated with orders but is simply unable to meet the demand for motorcycles.
The Chennai-based company produces 4,500 bikes on average every month, while the market demand exceeds this by at least 2,000 units.
“It is a difficult situation and we are looking at a variety of options to get over this problem,” Mr R. L. Ravichandran, Chief Executive Officer, told Business Line. One of the chief problems lies with the paint shop, which is not large enough to cope with the orders.
“In fact, our bigger problem is meeting the demand for the Classic model, which uses a unique paint and painting process. The in-house capacity is just not able to satisfy the demand. We have a six-month waiting period as of now,” he said.
Help in Pune
Royal Enfield has partially overcome this problem by reaching out to the Kinetic group. Pune-based Kinetic, which recently sold its two-wheeler business to Mahindra & Mahindra, has spare capacity at its Ahmednagar paint shop which Royal Enfield is now using to paint key motorcycle components including front and rear metal fenders, cover tubes, toolbox and ornamental covers for its Classic model.
The company, however, needs a long-term solution. Its plant is located not in one of Chennai's bustling auto hubs of Maraimalainagar or Sriperumbudur, which are home to the likes of Ford and Hyundai, but in Tiruvottiyur, one of the oldest parts of the city.
Mr Ravichandran said the company is working at ways to overcome the present supply crunch.
“There is only so much this plant can take, but it is not as if we can just start producing motorcycles overnight in a new facility,” he added.
Coming full circle
Amidst this anxiety, there is also cause for cheer at Royal Enfield. Quite unlike the big-ticket manufacturers like Hero Honda, Bajaj Auto or TVS Motor, this company is a niche player with a focus on high-end leisure cruiser bikes.
When Mr Ravichandran took over as CEO five years ago, things were not in the best of shape. The company was rather wobbly with a fragile bottomline, a limited array of products, and with more stocks than demand.
“Since then, things have gradually got back on track with the domestic and global business looking more buoyant, thanks to a focused business strategy on new models and engine, stricter quality standards, well-tuned brand initiatives and a vibrant team,” he said.
And the biggest turnaround of all is the waiting period for bikes which ranges from eight weeks to six months. “Customers have been calling non-stop to check when they can own one. We are pulling out all stops but this is still not enough,” Mr Ravichandran said.