Royal Enfield: Demand vs Quality

What is Royal Enfield?

Royal Enfield is an Indian automative company which is producing classic motorcycles for a long time.

Success from 2000:

After Lal became the CEO of the company, the company which was on the brink of bankrupcy was saved and started to see some increase in sales. The motorcycles where modified rightly to remain relevant to the contemporary audience. The move to Unit Construction Engine from cast iron, change of gear lever position to what is seen in most other motorcycles are some of the major changes which the potential customers felt inviting to buy.

Come 2010, the sales started to pick up and started growing consistently at about 40% rate.

Quality issues:

Most of the earlier generation quality issues are greatly reduced with the UCE engine, but the motorcycles were not on par with the other manufacturers in terms of general quality. People who bought RE motorcycles had to spend a lot of money for the up keep. Lot of recurring costs in the form of parts replacement. The longevity of the spare parts was poor and the cost of the parts are on the higher side. This made owning a Royal Enfield motorcycle a really costly affair apart from the upfront money spent in purchasing the motrocycle.

Royal Enfield caters to a niche group of riders and usually they are alright with spending the extra money. Being in a niche segment of motorcycle (read classic), other manufacturers were not even attempting to compete. The lack of competition enabled RE to continue making the motrocycles with the same quality issues.

Lack of competition:

For a long time, it seemed none of the manufactures were even thinking above 250CC motorcycles. Slowly this started to change and the market started to getting used to higher CC motorcyles. With this came a few lame attempts from some manufacturers to compete against RE.

Bajaj Dominor 400:

Bajaj made a fairly good, well priced power cruiser named Dominor 400. It had a 373.3cc heart derived from that of the duke 390. Bajaj pited Dominor against RE in its ad compaigns which were not seen in good light by the market, eventually Bajaj altered the later ad content to be appropriate. Dominor saw some success, but the number of sales was very less and uncomparable to RE.

"Don't hold back" is much better a tag line.

Jawa:

Mahindra bought and attempted to resurrect the old classic hit Jawa motorcycles. While the motorcycles gathered good reviews all round, the company was plagued with logistic issues which created delays in the delivery. Along with the lack of service centers, this issue resulted in Jawa failing in the marker albiet being a capable product.

Benelli Imperiale 400:

Benelli came up with its own classic motorcycle named Imperiale 400. The bike had its own positives and was seen as a capable classic steed. But Benelli's lack of after sales support (very few service centers) and the notoriety of its other motorcycles' high cost of maintenance made this bike a failure in the market.

Ethical business model:

The lack of competition and the relentless buyers in the classic segment made RE to stick to their game. There was a time when RE launched Himalayan with a slew of issues. This resulted in initial sales drop. RE later addressed the quality issues and the later iterations of Himalayan were fairly issue free. RE also launched the 650 twins (interceptor and continental GT) which gathered wonderful reviews and also were made well.

This goes to show that, when required RE can deliver on quality. This makes one wonder if RE was holding back on quality on its motorcycles to attract higher cash flow in after sales and service. If that was the case, it could have yielded the company well monetarily, particularly since the products are niche and not many competitors are out there to push RE to improve quality.

But is this an ethical model of business? Does one require competition and is that the only push to improve quality? I will not judge and leave the readers to make their own conclusions.

Signs of Improvement:

Lately things have started to improve. With the launch of meteor 350, RE has made a marked improvement in the engine department when it comes to refinement. The level of refinement is commendable from what the experts say. The motorcycle is now more capable in all arenas of use that the thunderbird was catering earlier. This could be a sign that the company is willing to change for better.

Honda has brought H'ness CB350 to the game, although only at the Honda Bigwing dealerships. This limits the reach of CB350 drastically. It is understandable why Honda wants to play this safe, but to be able to compete against RE, it would require alot. The motorcycle on the hand is good and is feature rich compared to Meteor. But with Meteor RE has upped the game. Regardless of where this rivalry goes, its good to see that RE is improving quality and the competition is growing.

Early Retirement (Indian version)

What is early retirement?

In a country like India, where there are very scarce amount of people eligible to pay taxes (or rather honestly pay taxes), early retirement is almost unheard of. Let alone early retirement, the conventional form of retirement is rather not well established. Majority of the Indian household still feel that they will depend on their children on the elderly years. This is not the best way to plan retirement. There is a lack of skill or knowledge or more importantly temperament when it comes to investment, that retiring from working for money with the returns from investment taking care of the expenses is not easy to percieve. May be the fortunate few who where able to reap the benefits from the real estate boom could afford to think about retirement.

Typical Indian household savings are 77% into real estate and 15% into gold, and a measly 5% into financial instruments like Fixed Deposits, Stocks, Bonds , etc,. There are 2 important problems with this asset allocation:

• Real estate which constitutes 77% of an average household investment isn't liquid.
• Historically, stock market returns are better than any other investment that an Indian household makes.

On the first point; it is not easy to sell real estate at a time that the owner would like to. It takes a few months to may be even a year depending on the demand at the location and the price at which the seller wants to sells. Furthermore real estate in India and also Gold for that matter are bought with a chunk of black money contributing to the buying. This means people who earn income after TDS (Tax Deducted at Source) might not find it easy to digest the fact that he/she has to make a cash transaction to a huge amount to buy a house or a piece of land. How comforting is the thoght that your hard earned after tax income goes into the pocket of a land lord as black money?

On the second point, historically stock market (market index) has given higher returns than real estate and also makes substantial gains over inflation. With the average Indian household effectively ignoring the stock market returns, they are pitted against a high value, low liquid, highly corrupted, debt intensive real estate to commit their investment.

To buy a house or a land, one has to commit a huge sum of money either saved or through financing. On the other hand one can buy a stock for even 500 rupees. If instead of waiting to save a huge sum to buy a land or using debt to buy a land and effectively spending the rest of the earning life repaying the debt, it would be effective to invest the savings in stock market untill one builds a large sum which can then be used for buying house (if it is required) or can be used to retire early since the stock marker is liquid and one can expend out of it.

On the numbers and the strategy to retire early, we will see in the next post...

Dean Koontz’s predictable writing and yet surprising ease in reading

I have been reading a few Dean Koontz novels and some of them are really good. But mostly, the books tend to have a predictable story, although quite highly deviated from reality. Recently, I read “Door to December” and I noted a surprising fact. I was able to predict that the little girl must somehow be the cause for all the mayhem. Although my hunch proved to be true later when I finished the book, I was glued to the story till the end. It is quite counter intuitive to learn that I can be equally, if not more interested, in a story which is predictable, as I can be to one that is not. The normal way to react to a predictable story is to shy away from it. But on the contrary I was attracted to it. If the story was about a bank heist, I probably would have shied away. This makes me appreciate Dean for the choice of the story line. There is a unique character to the way this prediction enhances the chances of further reading. The novel often starts with vividly disturbing situations; these situations trigger our intuitive mind to construct a fictional yet fascinating reason for it. This intuition spawns from the experience of having read a few of Dean’s books earlier. So the trained mind can think and perceive practically unlikely yet highly probable story line. This the reader gets more so firmer in mind as the story moves forward which keeps the reader constantly going at the book.

I do not know if Dean did this on purpose, if he did, he really is brilliant!

If you are intrigued by this post, give a short at his books and come back again to awe yourself.

Phantoms by Dean Koontz
My rating: 5 of 5 stars

The best plotted thriller I have ever read. We don't get to see a sincere story to this extent even in Koontz other books (excluding Whispers). The build up given is humongous; when one knows what is the antagonist (yes it an IT), it becomes evident that the build up is needed and is sustained till the end. Only character which comes similar although not quite as dramatic would be the "Pennywise Clown". While Stephen King made his demon a totally mythological one, Knootz's uniqueness is in the way he has reasoned the demon with logic.

View all my reviews

Cold Fire By Dean Koontz

Cold Fire by Dean Koontz
My rating: 4 of 5 stars

Fascinating imagination.
I felt Holly Thorne more as a bully. Jim should have been given more character than merely a subject. It was annoying lot of times to read the way Holly was pestering him, equally annoying to find that Jim always agrees with Holly, which seemed like the only way the author intended the story to progress. It also occurred to me that Holly is actually Dean himself in female form; and when Jim agrees to each idiotic seeming logic of Holly, I felt like he does so just to get her off his back.
It would have been a better story to read had there been no Holly and Jim had to go through it on his own.

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Wilbur Smith and Abridged Content

It is only two books now that I have read of Wilbur Smith. Although I admit that "River God" is not a book that I would even contemplate on criticizing on its flaws (it is almost blasphemy if I attempt it), I feel like I can talk something about "Eagle in the Sky", which, when not been close to what the former novel is in terms of its magnitude in the content of well crafted writing or the magnitude of the relevance when been true to history.

"Eagle in the Sky" is an ambitious novel intended to cherish the idea of entertaining the mind with richness both in terms of the material and the psychological. When not failing to do so - it might well be enough for people who feel the urge to pass the time, it does not deliver on certain fronts.

The problem with this book is that, as a reader I could only see the character from outside the person's mind. I was always a spectator. The book should have been about the main characters more than about the story. There are lots of places where the character's feelings are narrated, but there is a subtle limitation to the extent it is done. The mistake, if I can call it that, is the in-your-face narration of the main character's feelings. This is the easiest and the least exciting way to do it.
I will give you an example; this might first look out of context, but observe closely and you will find what I am pointing to:
The main character David Morgan is a skilled pilot. He flies a specific flight with great passion and also manages to join the air force as one of the intruder intercepting flight. Now whenever David tries to fly the aircraft, we see that David took the flight, hit the gas, flew into the sky, shot the intruder; all the while David and feeling a lot of things inside his head, but what is there to the chemistry of David and the aircraft? There is no man and machine relation; there is no subconscious and habitual routine that David likes in the procedure that makes the machine his best buddy.
I would have so much liked to know the aircraft itself as a character. Give it a name, call it with its name. Describe the good and not so goodness of the machine. Ask David show the passion he has in the way he thinks. There is nothing of these sorts in the novel. David is a good pilot, he knows how to fly and he likes it and blah blah blah. Sorry, we are not talking about facts here, this is fiction, we need the character's true nature to come out and entertain as rather a narration that is so unconnected. Do you get where I am going now?

Perhaps plotting a story is restricting the author to feel free in dwelling in the character's fine nature? Or is the author tired of doing research about war aircraft that he so much limits the content about them.
Th novel while having its downside, does not let you down completely. It still has enough to keep your hatred at bay so that you can finish it.

Now going to the title of this post; the lack of the content mentioned above made me feel that I am reading something that is intended to hurry to the story. In short I felt like reading an abridged version of a novel.

Weekend Ride - Alamparai Fort

        Alamparai fort is 100 kilometers from chennai and 50 kilometers from Pondicherry on ECR. It's not flooded by tourists and is surprisingly peaceful and relaxing to visit the ruined fort and have the experience of the sea breeze and also to notice the backwater which gets logged very close to the fort. Let me give you the opening shots of the fort which also gives some back story about the fort.

        The fort is intentionally ruined during the British rule. What ever remains, stands as a sign of the destructive nature of the then rulers. Nevertheless it is some feeling to get into that place and importantly the place is photogenic, so if you like to take pictures, you will actually find the ruins as treasures. It very much looks like a good place for shooting movies. Lets see a few shots that will prove my observation, even if I am not a good photographer, the place speaks for itself:

        And as you could see, that is my brother with a riding jacket, and on boots; he is also wearing a knee guard inside his pants. Yes, we are not reckless bikers, we give great importance to safety. Now back to the fort:

        There is a kind of a back water close to the fort. Combined with the ruins from the fort, the water looks unique.

        As I mentioned earlier, this place is not flooded by tourists and that helps you when you want to escape the city traffic and get yourself relaxed. Carry drinking water with you though, since the fort is a couple of kilometers from the main road and you will not find a shop near by easily. 

        Below is a parting shot of the wide wall of the fort from the inside:

 

        And my then drive, Avenger:

         The Duke 390 that can be seen in the corner is my brother's, it had a tough time playing it down for Avenger. 

        Hope you enjoyed the reading and viewing. Lets meet on some other day and at some other place!