Mahindra War Room Design to Disrupt

“ICONIC DISRUPTION - JAWA KOMMUNITI”

LIVE BUSINESS CHALLENGE FROM CLASSIC LEGENDS

“ Pivoting is not the end of disruption. It is the beginning of the next journey.”

Chapter 1: Empathize

India is the 7th largest country in the world, accounting for 2.4% of the earth’s
landmass and one third of population. Such a geographically vast country full of
dynamic people is bound to be a natural breeding ground for mobility related
businesses. Though a slow starter, India has been catching up in road
construction, and is home to the second largest road network in the world only
next to the United States, with 4.3 million km of both paved and unpaved roads.

As India attained independence, the country’s focus shifted from the long-drawn,
all-pervading freedom struggle to normal life and economic development, and the
need for Personal Transport grew. Public transportation was limited. The 4-
wheeler industry was highly regulated, and the usage of 4-wheelers was limited
to the higher echelons of the society. Two-wheelers filled the wide gap between
the cheap but restricted public transportation, and the almost unaffordable 4-
wheelers. The ownership and use of 2-wheelers started to be the new Indian
dream, with low upfront investment, ease of daily use and low cost of operation.

Chapter 2: Design & Ideate

While the question of who exactly invented the first motorcycle is much-debated,
the early two-wheelers came from the Germans, British, French and Belgians
since the 1880s. Companies such as Royal Enfield and Harley Davidson came in
the early 1900s, but the popularity of two-wheelers really started to grow globally
after 1910. The first World War between 1914 and 1918 saw all branches of
armed forces in Europe use 2-wheelers extensively. After the war, 2-wheelers
began to enjoy sport-vogue, being used for sporting and touring competitions.
After the first world war, one František Janeček from the Czech Republic
developed a flurry of designs and patented over 60 inventions. Drawn to
Motorcycles, he purchased the motorcycle business from a German company

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called ‘Wanderer’, and combined the first two letters of his last name to the first
two letters of Wanderer, to create the first ‘Jawa’ motorcycle in 1929.

Foreseeing the large upcoming need for economical and lightweight motorcycles
for daily use in post-war Europe, he forged what would become a decade long
collaboration with the renowned British engineer G.W. Patchett. Patchett’s
lightweight Jawa175 caught the imagination of the Czech market. Jawa 250 and
350cc followed in the 1930s, establishing Jawa’s reputation for brilliant engines
and exceptional handling. While the second world war put a pause on the
production of Jawa Motorcycles, Janeček’s passion kept secret development
efforts on for the iconic ‘Perak’ even during war time. The new Perak that came
out in 1946 won the gold medal at the Paris Auto Show for its several
innovations.

Chapter 3: Prototype & Test

Back in India, in 1948, one Bachraj Trading Corporation Pvt Ltd started to import
two and three wheelers from Vespa of Italy. Around the same time, Automobile
Products of India (API) started manufacturing scooters in India. At that time,
Jawa was imported in India by many importers and distributors, one of the largest
being Wazir Singh & Sons of Delhi. In 1949, Ideal Motors, a Bombay-based
importer firm headed by Rustom & Farrokh Irani entered into the business of
importing & distributing CZs & Jawas in western & southern India, evolving their
business from just an importer of motorcycles to an importer & distributor firm.
With initial success, the future prospect seemed bright for CZs & Jawas in India,
hence Farrokh & Rustom got serious about setting up a manufacturing unit for
Jawa as early as 1954.

In 1955, The Enfield Cycle Company from Redditch, England collaborated with
Madras Motors in India to form Enfield India, that would assemble the Royal
Enfield motorcycle under license. Until 1958, API and Enfield were the sole
producers of 2-wheelers in India. The scooter segment saw initial domination by
API, which was subsequently challenged by Bajaj Auto. While many government
and private enterprises entered the segment, most of them failed, resulting in a
sellers’ market where the waiting period to get a scooter from Bajaj was 12 years!
After surmounting many challenges, Ideal Motors succeeded in setting up a

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manufacturing unit in Mysore in 1961 and Ideal Motors became Ideal Jawa India
Ltd, marking the beginning of the golden era for Jawa motorcycles in India.

In the 1960s, motorcycle segment was dominated by 3 manufacturers - Enfield,

Jawa and Escorts. While Enfield was a 4-stroke bike, Jawa and Rajdoot were 2-
stroke bikes. While Enfield 350cc and Escorts 150cc bikes dominated the
motorcycle segment, Jawa appealed as an aspirational icon, retaining its charm
across generations. Ideal Jawa India Ltd, manufactured sold motorcycles under
the brand name ‘Jawa’ until 1973, and under the brand name ‘Yezdi’ from 1973 to
1996, establishing racing legacy and cult status for both Jawa and Yezdi brands.

From a smooth ride in the 50s, 60s and 70s, where the Government restricted
capacities, two wheelers were disrupted with sudden growth in the 80s owing to
change in Government policy. The two-wheeler market was opened to foreign
competition in the mid 1980s, and 4 new Indo-Japanese joint ventures came up
rapidly - Hero Honda, TVS Suzuki, Kawasaki Bajaj and Yamaha, growing the
category by 25% year-on-year for several years.

Sensing the popularity of energy efficient 2-wheelers in India, Kinetic

Engineering, founded in 1970s formed a joint venture with Honda, called Kinetic
Honda. The joint venture launched the first variomatic gearless electric start
scooter in India, which gained wide popularity for its ease of use.

Chapter 4: Scale Profitably

The 1990s saw the industry go through transformative change: As the paradigm
shifted to fuel efficient 4-stroke engines, the commuter segment grew
exponentially while the premium segment was stagnant at best. In this changing
consumption landscape, Ideal Jawa stopped production of Yezdi bikes in 1996.
Honda ended the joint venture with Kinetic in 1998 to pursue their own plans for
India, leaving the joint venture bereft of essential technology, driving the
company out of business. The 2000s saw the phasing out of 2-stroke
motorcycles owing to pollution control norms propelled by the Kyoto Protocol. In
spite of all these changes, two-wheelers grew steadily year on year, feeding off
the growing population of young people.

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In 2008, Mahindra entered the two-wheeler business inorganically, by acquiring

business assets of Kinetic Motors, including manufacturing facilities in Pithampur
(near Indore) and all the brands that were selling then. Initially, Mahindra aspired
to be a full spectrum two-wheeler manufacturer, setting up its R&D unit at
Chinchwad, Pune and launching a slew of scooters and motorcycles under
Centuro, Pantero, Mojo, Stallio, Rodeo, Gusto, Flyte, Duro, and Kine brands.
Mahindra also continued its pursuit of inorganic growth on a parallel track,
acquiring a 51% stake in Peugeot Motorcycles (also called Peugeot Scooters),
part of the PSA Group of France, in 2015, followed by the iconic BSA & Jawa
brands in 2016. To venture into leisure motorcycling, Mahindra bought a
controlling 60% stake in Classic Legends Pvt Ltd, with the goal of re-launching
the BSA brand in international markets, and the Jawa brand mainly in the Indian
market, with new products that would capture the unique character, DNA and
ethos of these brands.

As India became the largest two-wheeler market in the world in 2017, surpassing
China, Mahindra reoriented their strategy in 2-wheelers, exiting the mass market
to focus on the premium, niche segment through Classic Legends, bringing alive
the lifestyle behind these iconic brands.

Chapter 5: Design to Disrupt

SIAM estimates that of the 21 million two-wheelers sold in India last year, about
13.6 million are motorcycles, which grew at 7.7% - a rate faster than the overall
two-wheelers at 4.9%. The premium 250-500cc motorcycle segment is estimated
at about 900,000 units and has 40 bikes on offer, witnessing the fastest growth
among all segments. Growth in this segment is primarily led by motorcycles from
3 manufacturers - Royal Enfield, Bajaj & KTM, with new entrants such as
Triumph, Benelli and Ducati vying for a slice of the pie. Inspite of being out of
production for 40 years now, Jawa motorcycles have retained their heritage value
and brand aura, with the machines being kept running by Jawa & Yezdi clubs
across the country.

Over the last decade, Biking clubs led by millennials and active bikers across
generations have sprung up with names such as Roaring Riders, Mysuru Jawa
Club, Beating Hearts Jawa Yezdi Motorcycle Club, Puducherry Jawa Club and so

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on. All trends seem to point that the world’s largest two-wheeler market is now
ready for a lifestyle play - the bike as a statement of personality – going beyond
seeing bikes as a functional product for mobility alone. Classic Legends believes
in the power of this nascent brand potential to grow the high-margin premium
motorcycle market. To tap this nascent potential, Classic Legends forayed in with
the revival of the iconic Jawa brand, launching the iconic Jawa and Jawa Forty
Two in India, in November 2018. The impact was evident straightaway. Jawa
became Google’s most searched motorcycle for the year 2018 just after the
November launch. Jawa garnered a healthy order book and a slew of firsts
followed. The brand opened 300,000 sq. feet of retail space throughout India and
started deliveries in March 2019.

Bringing back the legendary Jawa was not Classic legends’ quest alone - it had
the backing and blessings of the huge motorcycling community in India. Jawa
was sold in India for about a decade till the early 70s and its DNA and vibe were
kept alive by the Yezdi till mid 1990’s. These legendary two strokes built a cult
following over the years that went far beyond the product, to have a plethora of
stories of adventure, romance, friendship and racing in their fold. Now Jawa as a
brand, plans to return to the very core of the idea that gives it strength - the
power of the community. The foundation of this is the passionate group of
individuals that kept the brand alive even when the company went out of
production. They painstakingly kept the machines going and proudly heralded the
idea of #builtnotbought. For many of them, the return of Jawa and its big
reception is a powerful validation of their world views. With new customers
entering the community, Classic Legends seeks to continue this camaraderie and
kinship to an ever-growing base of customers.

Bringing the power of community alive requires an understanding of the building

blocks of these communities, and the social capital that comes from being in one,
something that has been done well by ‘blue-blooded’ brands. Community
members of such brands have a powerful emotional connection that goes
beyond the product connection. The original adventurers on the Jawa bonded
over road trips, racing and adventures in the 80s and 90s. Today, the narrative is
built around events such as the motorcycling festivals and concerts such as the
NH7 Weekender, VH1 Super Sonics and other such regional gigs in each city.
The OTT content culture has also supercharged this idea of road trips and

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bonhomie, aiding the rise of operators like Drivezy, Wicked Rides and Zoom car.
A big part of young India wants to escape the maddening city and what better
way to do this than to go on a weekend ride to a highway breakfast joint or plan a
bigger ride once a quarter. One of the globally acclaimed motorcycling
community events at Sturgis established in 1938, features in every motoholic’s
‘place to be’ bucket list. The Harley Owners Group (HOG) is also a powerful
community, attracting members not just for the value-added services, but the
powerful identity it extends. Jawa’s strong community of passionate fans
celebrate brand stories, resonate with brand messages and amplify it with their
own perspectives. Communities exercise strong influence on brand awareness
and recognition, propelled by social media. Hashtags such as #JawaIsBack,
#JawaExperiences, #JawaJourneys are valuable social currencies. Reaching out
to truest customers would be a journey requiring large social adoption, that
needs to be curated and promoted in right areas to build new narratives. Classic
Legends celebrates marquee events such as the International Jawa Yezdi Day
with Jawa clubs across the country, on the 2nd Sunday of July every year, apart
from regional events such as Forever Riders Meet, Southern Raid etc. As the
new community starts amalgamating with Old Jawa clubs, a new phenomenon of
#JawaMeetsJawa is bound to occur, uniting generations spanning from baby
boomers to millennials, by their common Jawa bloodline.

Based on this background, design a community building strategy and

roadmap for Jawa. Ensure the strategy provides the roadmap of the new
Jawa community springing forth from the Jawa loyalists of the past. Scan
the entire landscape of motorcycling and associated subcultures in India
today, to create a unique and differentiated identity for the Jawa
community. Use strategies of community centric content creation, curation
and dissemination to build the brand identity, as well as suggest the way
forward in this direction. Comprehensively lay out specifics around 3-year
initiatives of company-sponsored, company-promoted and company-
owned content properties and investment plans with robust returns on
investments, to build brand identity - keeping in mind that Jawa is strongly
community based and hence does not believe that Television ATL is the
primary channel to reach audience. Explore possibilities of organic
offshoots of merchandise offerings of the brand, in a self-sustaining
business vertical.

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