“In the last six years, we've done a lot, and we are very well positioned with the second today in the country, in a segment that is a very exciting one in premium motorcycles. And I'm looking forward to that day, we're actually going to be number one, not just number two,” says Dr. Anish Shah, MD, Mahindra Group, at the launch of Classic Legends’ latest offering, Jawa 42FJ. The ‘neo-classic’ motorcycle is priced at INR 1.99 lakh, ex-showroom, Delhi.
The premium segment, also referred to as the midsize motorcycle segment, is currently ruled by Royal Enfield. Dethroning it may be easier said than done, but Classic Legends is banking on the power of brand stories to earn increasingly larger consumer mindspace and help build the business.
“I think stories build brands. At their essence, at their core, brands are nothing but an aggregation of their stories, why they were formed, how they were built, how they grew. Now, new brands tell new stories, and often old resurrected brands also tell new stories,” says Mahindra Group Chairman Anand Mahindra. In the case of Classic Legends, new stories are being built, of resurrected brands.
Mahindra draws a parallel between building Classic Legends and running a marathon. “We stand before you running a marathon. We may fall, we may slip, but we'll rise up and we'll keep on running, he says.
Classics: more failproof business model?
Like Classic Legends, M&M’s first tryst with the two-wheeler market was also through an acquisition. It entered the two-wheeler space with the acquisition of Kinetic Motor in 2008. The renewed business journey ten years later seems to be on a better footing. In addition to a second position in the domestic midsize motorcycle market, Classic Legends claims a segment leading position in the UK, with its BSA brand, launched in 2021.
The resurrected BSA brand was launched in India through the Gold Star motorcycle on August 15th this year. Classic Legends’ co-founder Anupam Thareja says there’s a waiting period for it. The 650 cc motorcycle is also a direct competitor to the Royal Enfield Interceptor.
Unlike the earlier volume-chasing commuter two-wheeler business, M&M’s Classic Legends strategy is seen to have a better chance at success because of it being built on ‘Classics’. All three brands – Jawa, Yezdi, BSA have a strong recall in India, and overseas as well.
What may be making the job of building the business relatively easier this time is that product planners do not have to predict customer choices 4-5 years in advance, which is required for modern brands. “The only place where you don't need to anticipate a trend is when you're making a classic, because by definition classics are timeless,” says Thareja.
Classic Legends is being bet upon by M&M as one of its ‘growth gems’. Thareja says the business model of Classic Legends has helped it to be profitable it its first year of operations. Last year, the company announced an investment plan of INR 1,000 crore, of which INR 350 crore is already invested.
Thareja says the rest of the investment will be made in the next 6-9 months. With the model lineup, of ten offerings, in place Classic Legends says it’s “going to go and invest in marketing, distribution, global expansion”.
Currently, Classic Legends clocks a monthly volume of 4,000-5,000 units, though in the last few months it is a little slow, which the company says is also due to factors like elections, rains. It plans to have sales of between 60,000 to 90,000 units this year. The support of the Mahindra production ecosystem, including the supply chain, has contributed significantly in achieving a healthy ROCE (Return on Capital Employed), says Thareja.
Classic Legends’ CEO Ashish Singh Joshi says the expansion plan this year also includes adding 100 outlets to the current count of 450, by October, and take it to 600 by the end of the financial year.
Electric classic in the pipeline
Along with the current model portfolio expansion, Classic Legends says it’s prepared for the electric era, that is if the segment it plays in goes that way. An electric BSA, developed in its technical centre in Coventry, UK, is said to be already in place. Given the average selling price of a motorcycle in the West, Thareja says that Classic Legends’ debut in the electric vehicle space will happen in the West as it’s still not a profitable proposition to launch an electric motorcycle in India yet.
Whether the electric motorcycle market will get charged up is anybody’s guess, but what Thareja is expecting is an “absolutely crazy” Diwali. It now depends on whether customers find Classic Legends’ stories, err brands, interesting enough to throng the showrooms.
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