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Interview: Ajinkya Firodia
TG: Tell us about Motoroyale
AF: Motoroyale was started as a multi-brand initiative, and we want to have a range starting from above Rs 3 lakh, all the way up to whatever price range it can take us. We started with MV Agusta because that’s the most exotic and most premium of all motorcycle segments. We launched the F3 and then the B3, or the Brutale 800 last year and we have a series of launches coming up this year. Then a notch below in terms of pricing will be Norton, where we are trying to have one of the most iconic brands come in with an irresistible offering. Then we have the SWM: the only on-road/off-road tourer in India, or in the world rather. The worldwide response for the product for SWM has been excellent so we think it is going to be a really good volume gainer for us.
TG: Is the same SWM SuperDual that we rode in Italy?
AF: Exactly the same. It has finally come to homologation, they could not even allocate a bike to us because they were selling whatever they made. It is based on the Husqvarna engine, SWM is based in the old Husqvarna plant. It will come in the price range of Rs 5.5-7 lakh so that’s a great price. The Africa Twin and all are Rs 12 lakh plus, or there are not really on-road/off-road tourers. So it hits kind of a sweet spot.
TG: Are you bringing in any other SWM products?
AF: As of now, no. They have a whole range of products – the Grand Milano – which has a small, retro Enfield kind of look. But being a new and exciting brand, the product needs to be unique. So as of now, we have not got any plans to get that. We did our market research and we think the 650 is the one that will give us the volume. Having said that, this is just the range they have now but they themselves are coming up with a better, bigger range. So in the future, for sure.
TG: Let’s talk about Norton.
AF: Yes, so Stuart is a rider himself. He’s the owner of Norton, and he’s very passionate. Let me tell you how Norton came about. When we started Motoroyale, I wanted to deal with exotic brands and Norton was one of the first brands that came to my mind along with MV Agusta. At that time I approached them through a friend of mine, for a distribution agreement similar to MV Agusta. Maybe CKD or something. But you know, right now Norton is an all hand-built, all-British motorcycle manufacturer. So it is very expensive. Norton is roughly twice the price of Triumph, even at CKD levels. Each part is taken and cleaned for hours by Brits. That’s what makes it so exotic. It is a different culture. But there has to be commercial viability and so we got talking about how to make this huge, and how it can be interesting. So I went and met Stuart, and we came up with an idea that we think is a winning idea. We signed a joint venture agreement in three meetings – both of us are both quick decision takers. The idea is to bring the Commando and Dominator in the first phase, by developing a lot of the non-critical parts here in India. But keeping the engine, the suspension, the brakes and engine related parts still imported. But effectively, bring it at a value proposition that you cannot resist. So that was the idea, and that’s why we bought thought it was a great idea. We just signed a 51-49 JV, 51 on our side where we will be developing the motorcycle and launching it by the end of this year, maybe January next year. It will be exactly the same motorcycle as is there, but it will come at an interesting price point. In the JV, the good thing is the territory in India as well as all ASEAN countries. So from here, the JV will export to Indonesia, Malaysia, Thailand, Philippines… all those markets.
TG: Initially, you’ll be also planning CBUs, right?
AF: We decided to come up with a limited edition CBU model, only restricted to 25-30 ‘India edition’ units. It will be restricted to India and will have some sort of Indian flair to the Nortons. When we did the initial press conference, we had so many people post about the Nortons they have owned for ages. The company started in the 1900s, so the brand is from then. It has too much heritage. There are a lot of people who want to buy these special editions, so we will be doing that in the next couple of months. That is before the manufacturing of the Commando and Dominator.
Going ahead there are more exciting things happening. First of all, they are also doing a V4 RR sports motorcycle that we may bring in CBU only because it is 1200cc. It will be only sportbike available in 1200cc because everyone else makes 1000cc as they use the same bike for racing. But these people have said they want to make something different, and good so they’re making the 1200 V4 RR. It’s fantastic looking. It has a dashboard that shows you where you’re reversing and all. ÂÂÂ
Going forward, we’re also planning to develop and launch a Norton 650 that was also displayed at EICMA. That will be a real volume gainer, to have a Norton 650 for Indian and Asian markets. That will again be made here for the JV. So the JV will make everything the JV requires, and they will also supply components to Norton UK if required.
TG: What is the sort of investment you have put in?
AF: Investment is a very tricky question because these bikes are already developed with Norton, and the tooling is already there. To develop one bike, Norton has already contributed in that sense, it cost them 5 million pounds to make a bike. With two-three bikes, they’ve already spent 10-15 million and that is already available to the JV as a major contribution from Norton. The brand is licensed to the JV as a major contribution. Whereas, all the other toolings we are developing in order to try to arrive at a perfect balance of retaining that British charm and making it viable for the JV, so we are investing in it. So the major part of the money will go in the tooling and we are setting up a common Motoroyale assembly line in our factory in Ahmednagar. So that assembly line is common between all the brands that Motoroyale will have and all of them will be CKD. There is an engine assembly, a vehicle assembly and a testing dynamometer so a total investment of 15-20 crores without the land, building and working capital. And that’s the only way to do two-wheeler business. You have to approach it from a position of strength. It is just how it is, its one of the best and worst businesses you can get in to.
TG: All this will be done under Motoroyale?
AF: The JV will distribute its products through Motoroyale. Motoroyale is the holding company that will hold shares in the Norton JV, as Motoroyale is 100 per cent owned by us. And Norton JV is only 51 per cent by us. So it will hold the 51 per cent shares.
TG: What about distribution? Will it be exclusive to Motoroyale?
AF: Yes so, we have three and we are expanding to another four or five. We are still looking. For Motoroyale dealerships, where Motoroyale will house all the brands that it ties up with. With the idea being that we want to start at Rs 3 lakh and then go upward. So the SWMs are 6-8 lakh, the Nortons are higher and the MVs are even higher. These will be in the top 12 of 15 cities in India because that’s where the market is. And then the Asian markets. We’ve just developed a new CIA and launched the new Motoroyale brand. So far, we were focusing on MV Agusta. But now we are also trying to create this biking culture – the most exciting place for biking. That’s how the distribution will be. We’ve got dealers in Bangalore, Ahmedabad and Pune. We’re looking at Bombay, Delhi, Hyderabad is coming up, Indore, Calcutta, Chennai.
TG: So when the JV is up and running, and you’re catering to the Asian markets, developing distributes there will be up to you?
AF: Up to us, the JV will do it. And we are in charge of the JV. I will be managing the JV, Stuart is on the board with me but I will be managing it. They have some distributors and we have the option of giving it to them, or appointing our own distributors. The other option is to come up with a CKD strategy in some other countries that we may have to do because it’s a very complex import duty structure. But it is a huge market and we will have distributors.
This concept of a multi-brand dealership may be new to India, but worldwide it is like that. A lot of the same guys distribute 2-3 brands in a shop. Luckily, I already know a lot of them – we meet for MV dealer meets and worldwide distributor meets and SWM distributor meets and exchange cards, so you know a lot of them already. And you also know the sales teams in these companies that know even more people. You just have to take that effort. Already we have some 3-4 inquiries, but let us get our India plans first before we think about this.
TG: What about MV Agusta? What plans for this year?
AF: Lots of excitement for MV this year, because Norton is still a year away. We have launched the Brutale 800 but now we are coming up with the 800 RR that is a 138bhp, two-tone beautiful. It will have variants – 800 RR Pirelli Diablo, 800 RR RC, 800 RR America. Then we are launching the Toursimo, which is an 800cc bike. They even know how to make tourers look beautiful and not like workhorses. It will come in the version of Lusso and RC. The F3 Euro IV with the F3 RC, and we may launch, we are not sure yet because MV has to still launch it – the 2018 Dragster. The Dragster and its variants. The Dragster is their highest selling product and we haven’t launched it as yet because they are coming up with an all-new one and we have to invest in homologation. The Brutale RR is expected in 2 months, it is under homologation.