Royal Enfield: cutting back to a million bikes a year
By 2000, Royal Enfield, the motorcycle business of the Eicher group, was making large losses and, by its chairman's later account, was slated for closure. Its bikes had loyal fans, but also a reputation for oil leaks and breakdowns.
Siddhartha Lal, then in his twenties, took charge and set out to turn it around. Working from the business's base in Chennai, the team cut costs, fixed the quality problems that put buyers off, improved how dealers looked after customers and modernised the bikes while keeping the character fans loved. In the mid-2000s Eicher also sold or closed most of its other businesses, 13 of 15 by one account, to concentrate its money and management.
Sales grew from about 25,000 bikes a year in 2004 to about 50,000 by 2010. The Classic 350, launched in 2009, marked a turning point. In 2024-25, Royal Enfield sold 10,09,900 motorcycles, its first year above ten lakh, including 1,07,143 sold abroad.
- List what you would stop to fund your core
- Fix the basics customers complain about before launching new things
- Keep what makes your brand loved
Chapter 6: Focus: cut to grow
Struggling businesses usually do too many things; cutting the weak ones frees money and attention for the strong.
- Decide what to keep, fix, sell or close
- Cut costs that truly go away, not the future
- Redirect money and people to the core that can grow
This article is adapted from the book. Examples marked “Example” use invented names and numbers; company stories are based on public sources listed in the book. For general learning; use your own judgement for your situation.
