Classic Legends to invest Rs 1,000 cr in 3 years to increase production

Mahindra group Chairman Anand Mahindra said the bikes belonged to the 'classic retro' segment, which had a growing customer base

Classic Legends, the makers of Jawa, Yezdi and BSA brand of retro motorcycles, will invest Rs 1,000 crore in three years to boost production, and launch an electric bike conceptualised from a new British product development centre.

The investment will be used for marketing, distribution setup for international markets, and new product development, said top company officials.

The Mahindra group holds 60 per cent in Classic Legends, and the rest is held by realtor Boman Irani and Phi Capital Founder and Managing Partner Anupam Thareja.

In an interaction on Wednesday, Mahindra & Mahindra (M&M) Chairman Anand Mahindra said the bikes belonged to the ‘classic retro’ segment and catered to a growing customer base.

Drawing a parallel with M&M's Thar four-wheeler, Mahindra said the bikes are strategically positioned as a ‘retro classic’.  Thar is selling 5,000 units each month.

The 68-year-old Mahindra said that building these bikes wasn’t “only about production but also passion”.

“We have learned that if you are in the classic vehicles business then the people who lead it must be passionate about it," he said.

The British government is funding half the cost of the company's electric bike  development centre to be built under the BSA brand in Birmingham, UK, said Mahindra. 

"The British government is funding our (BSA) electric bike design centre, and the design -- which is yet to be revealed -- is ready. One has to be a little more sanguine about how quickly it will happen. The smart money would be where there is a good transition. The key is to have it ready,” Mahindra said.

Thareja added that the electric bike will be ready by the end of next year, and will also target the niche segment.

"We are selling almost 4,500 bikes a month in India and we expect to financially turn around by the end of fiscal 2024," said Thareja, who is credited with turning around Royal Enfield bikes. The investment of Rs 1,000 crore is being made in addition to the Rs 1,000 crore already pumped in by the company. Despite a booking of 1 lakh, the company was hit hard by the Covid pandemic in 2020 but managed to turn around its operations by ramping up its production to meet the rising demand, he said. 

The company has a capacity to manufacture half a million bikes at Pithampur near Indore and plans to export Jawa, and Yezdi bikes to Europe from the site. The company also launched the BSA branded classic bikes in the UK and parts of Europe in February this year.

Apart from Europe, BSA branded bikes will be launched in Japan and the company is waiting for certification from the local authorities.

The fresh investment will be deployed from a combination of internal accruals, existing shareholders and external investors.

Jawa game plan
 

- Jawa, Yezdi sells 4500 units a month

- Company expects to turn around by March 2024

- To make e-bike under  BSA brand, to make in UK plant

- Co planning to export from India to rest of the world