Royal Enfield roars back on quieter, sleeker bikes

Royal Enfield, a 119-year-old Anglo-Indian motorcycle maker with a cult following, has brought its distinctive bikes into the modern era with new and quieter engines and can't make them fast enough to meet demand.

The once-sleepy company sold 74,600 motorcycles in 2011, a 40 per cent increase, all made at its 57-year-old factory on India's southeastern coast, and is spending $30 million this fiscal year in a push to double capacity and upgrade manufacturing technology. For now, customers must wait six to nine months to get their bikes.

A new engine has replaced Royal Enfield's antiquated cast iron engine, boosting acceleration, performance, mileage and reliability, and reducing emissions.

The company is best known for the powerful Bullet model, but it is the newer Classic series that is driving growth in a crowded and fast-expanding Indian market where 10 million motorbikes were sold last year.

Royal Enfield's motorcycles start at Rs 108,000 in Mumbai and rise to Rs 175,000, against Rs 72,000 for a 220 cc Bajaj Avenger, a similarly powerful bike also marketed towards enthusiasts.

Harley Davidson, whose bikes start at 560,000 rupees, is part of a slew of overseas manufacturers such as Britain's Triumph and Japan's Kawasaki that is ramping up activity in India to capture a growing premium motorbike market.

Purists still come to the company looking to buy a bike with the old engine, but they have to go to the second-hand market as production ceased in 2010.

Royal Enfield originally built motorcycles to be parachuted into enemy territory by British forces during the Second World War, and the classic styling and trademark thumping of its engine at full throttle drew a legion of gearheads to the brand.

It rolled out its first motorised bike in 1901 and entered the Indian market in 1949, where the Bullet, now in its 80th year of manufacture, became a staple on the country's roads.

Royal Enfield, which stopped building bikes in Britain in 1970 and was bought by India's Eicher Motors in 1994, expects to open a new 50-acre plant in the southern Indian state of Tamil Nadu next year, taking capacity to 150,000 vehicles.

It is a niche manufacturer in a country where mass-market players led by Hero MotoCorp and Bajaj Auto sell cheap bikes as basic transportation and family vehicles.

The company sold just 3,200 bikes overseas last year and is looking to expand its export markets on the strength of its upgraded engines. It recently signed up dealerships in Malaysia and the Philippines, and is working to resurrect its distribution network in Germany and France.