Wednesday, January 5, 2011

Royal Enfield CEO Ravichandran moves to Eicher board

The man tunred around the sagging fortunes of the iconic motorcycles company Royal Enfield in the past five years has now finally moved ahead from the saddle and has gone to join the Eicher board. It has been reported that R.L. Ravichandran wrapped up his last day as CEO of Royal Enfield on December 31.

In a talk with the business daily The Business Line, he said “It is really no big deal. The show goes on at Royal Enfield and I continue to be associated with the Eicher Group." He is now getting ready with his new assignment as Executive Director and Member of the Board. The report stated that what gets him excited, though, is the remarkable turnaround of Enfield from the time he took over as CEO in mid-2005.

In that period when he came on board, production numbers were little to write home about and though the Bullet brand still wove its magic, it was confined to a niche buyer category. It was reported that today, the same Royal Enfield has a waiting list of eight months for its Classic model which, incidentally, made its debut in California last month. The company has also zeroed in on a second plant in the South as its unit near Chennai is choked to capacity at nearly 5,000 units a month.

The report states that the most heartening development for Ravichandran is the brand is now well and truly aspirational. “This is a tremendous moment especially when we are a niche player and still manage to catch the fancy of a mass market,” he said, according to the report. It was mentioned that for someone who has been with TVS Motor and Bajaj Auto, both of which were in the big numbers game, the transition to Royal Enfield must have been difficult. “This was hardly an issue. I was fortunate enough to have worked with two big groups and had seen heady times. Enfield needed to get back on its feet and I was fortunate to have a good team for the turnaround effort. Siddhartha Lal, the Managing Director, also gave me a complete carte blanche,” said Ravichandran, according to the report.

The report states that though this seems like a fairytale ending to his tenure, the five years involved a lot of hard work. In the first place, this was a decades-old plant in not the most attractive location. Being close to the sea also meant equipment was vulnerable to corrosion. The report quoted him saying “The top priority was to get the house in order. We created new manufacturing systems and made things a lot more streamlined at the plant. All this had to be done on an airtight budget which meant there was no room for any wild experiments."

There were other challenges too. The report mentioned that for a niche bike maker, Royal Enfield could not afford any product goof-ups too. A lot of care was taken to ensure that new launches were keeping in line with emerging market trends and requirements. Simultaneously, efforts were taken at the retail end to keep the excitement going. The report said according to Ravichandran, one of the biggest achievements was in the engine transition exercise. It was not the easiest of tasks to get the new UCE (unit construction engine) fitted seamlessly across the 350cc and 500cc bikes. However, his team met the challenge head-on and pulled it off. He was quoted “Today, I am pleased that Royal Enfield stands tall when sceptics were ready to write us off. People wondered how we would survive the onslaught of stronger players as well as new entrants like Harley. I can proudly say that this company is now in a league of its own."

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