Govindarajan Balakrishnan
Interview with CEO Royal Enfield
55-year-old Govindarajan Balakrishnan has a long history with Royal Enfield. He served as COO from 2013 to 2021, after which he briefly served as Director. He was subsequently appointed Chief Executive Officer, along with duties as a full-time Director of the Board of Directors of EML (Eicher Motors Limited), in May 2022.
Hailing from Chennai, he comes from a Mechanical Engineering background with a post-graduate degree in Materials Management. He joined Royal Enfield as a manager and worked his way up through the ranks, sharing a candid attitude when explaining that he thinks problems need to be solved, not just discussed . He focuses on agility and listening to customers.
BGR, or BGR for short, is also an EML Director on the board of directors of Stark Future. EML acquired a 50 million euro stake in Stark at the end of 2022.
BGR’s role included establishing technology centers in India and the UK, and was a driving force behind the expansion of their global footprint, including the establishment of four subsidiaries and five CKD factory (complete dismantling kits sent for assembly elsewhere in the world).
Specifically on motorcycles, he was involved in the development of the Himalayan twins, the Interceptor and the Continental GT 650, as well as the Super Meteor 650, along with the J platform, which included the Hunter, Meteor, Classic and Bullet models.
Trev caught up with Govindarajan Balakrishnan recently at the opening flash new Royal Enfield dealership in Sydney, Moto Machine.
Trevor Hedge: Did you and your fellow management team at the India headquarters ever imagine that Royal Enfield would achieve the success it has in Australia? The brand has truly reached new heights since Urban Moto Imports took over distribution in 2016. I have to imagine that sales numbers have exceeded your expectations both here and in New York. Zealand.
B. Govindarajan: “Well, I think about eight, nine years ago, the UMI distributor, we signed up with them and they have been a good partner of ours and now they are actively looking at expanding their retail network. That is very good. I have visited all the retail networks in the past few days and it is working great.
“In terms of the market, I think the market hasn’t grown in the last few years, but with all the new products coming out and with the macroeconomic sentiment opening up in Australia and New Zealand, I’m very confident I think the numbers will continue to increase.” to come up for Royal Enfield from time to time.
“I am now pleased to inform you that we are among the top three companies in the Australian market. (in the 250-750 cc segment), and we are now the number one selling motorbike in New Zealand, and the Himalayan is the best selling motorbike in New Zealand.”
Trev: I witnessed it myself in New Zealand. I was there with my partner on holiday last year and we were in Queenstown. I think, there’s Royal Enfield, there’s Royal Enfield, there’s Royal Enfield, so I’ve definitely seen your success firsthand in New Zealand. How do Australia and New Zealand rank in terms of Royal Enfield’s global sales?
B. Govindarajan: “Australia is also a top strategic market for us and for us. The UK, USA and Australia are all very important markets and with the current range of motorcycles we have, we feel the Australian market will soon open up for us as well.
“Basically, the Himalayan, the new Himalayan has arrived – because Australia is a motorcycle market that likes adventure bikes – the Himalayan is a perfect bike for adventure bike lovers, And that is why I am very confident that in the Australian market, Royal Enfield will increasingly gain market share.”
Trev: Royal Enfield’s three-year warranty and roadside assistance package is 12 months more generous than most other brands in this market. Is that bike driven by Joe and Urban Moto or HQ in India?
B. Govindarajan: “I think fundamentally, Royal Enfield believes that we should give people peace of mind when they buy Royal Enfield. They should just enjoy riding motorbikes. They should not worry about any problems that may arise. So we always feel that you are part of us, you should enjoy riding a motorbike and we are here to support and take care of you. Go, sit on the saddle of Royal Enfield, enjoy the feeling of riding a motorbike.
“That was the fundamental thing that drove us to make that decision. It was not a tactical decision. Essentially, it’s about the love for motorcycling and the connection we want to have with consumers, thereby enjoying motorcycling. That was our deciding point.”
Trev: But again, was that bike driven from Urban Moto in Australia or was it driven from India?
B. Govindarajan: “I think Royal Enfield globally has started doing that. That’s what we’re looking at market by market.”
Trev: Part of the Eicher group, owners of Royal Enfield, of which you are a director and Eicher has shares in Starkvarg. How big a stake does Eicher have in Stark and is this part of a broader vision of cross-pollination between Stark and Royal Enfield? Will Stark’s experience eventually help bring Royal Enfield into the electric vehicle space? Is there a rough timeline for what you envision this might bring to fruition somewhere down the line?
B. Govindarajan: “So Stark is a startup from Spain and they have the same thought process that Royal Enfield also has. They are good at modular design, compact design and lightweight materials. It’s all over the field and it’s essentially a different kind of motorbike; they are off-road motorcycles; We are not in motorbikes.
“But what Royal Enfield brings to Stark is in terms of supply chain efficiency, growth, the problems they can solve and in terms of scaling, the problems they are struggling with as a company. How to be a startup. So we help them in this. We will probably produce some components for them in India. And they will do some designs for us at their offices in Spain and Croatia.
“Because the thought process is similar, we have invested in Stark and for now, it is just at the technical cooperation level and we will see how it progresses. Any investment has to be built on a relationship basis and lasts only about a year, the relationship is very positive and is being built and we will see how it goes over the course of a year. Period.”
Trev: But Eicher has a financial investment in Stark? Do they own a portion of the equity?
B. Govindarajan: “Yeah, we invested in Stark. About 10%.”
Trev: And some of the things Stark is doing as well, not just in the end product but also in terms of how they retail their products, it’s quite revolutionary. Not only in the way customers order and select their bikes, but also their parts are done through the same process on the website and all the rest of it. Do you see some of the things they’re doing in that approach that could eventually be where most of the motorcycle market could go towards that model?
B. Govindarajan: “It’s too early to say because consumer preferences are changing. So direct to consumer, D2C, is what today, everyone is talking about it. So Stark has adopted it and what Royal Enfield is doing is we are testing all these things. We’re going to create a playbook on what D2C means and what it means for different retail formats and all that. We actually do surveys for the future.
“All of those things will form a playbook, we will pilot, test and then be ready in case the market is ready to accept those, at which point we will transition. Currently, we are not changing the structure.”
Trev: Thanks for your time. I hope you can explore more of Australia while you are here and when you return. Congratulations on the success of your brand both here and in New Zealand.
B. Govindarajan: “Thank you, Trevor. It’s been great talking to you.”
