Will custom-made Vardenchi Motorcycles be the next game changer?

By Pranbihanga Borpuzari

India, already home to the largest two-wheeler manufacturers in the world, might now accommodate the manufacturers of the best looking motorcycles in the market.

Vardenchi Motorcycles whirred its way into this segment with custom-made motorcycles in 2005. Having established itself in the market, it now plans to widen its base and get into manufacturing, maintaining customization as its USP.

Vardenchi is the brainchild of Akshai Varde, 32, who successfully managed to convert his hobby into a business. “Motorcycles have always been my passion. Even as a toddler, I always wanted to sit on a motorcycle,” says Varde.

Varde purchased his first motorcycle, a Royal Enfield Standard 350, when he was only 22 years old. Unlike youngsters his age, he wasn’t satisfied with it and promptly set out to change its looks. He stripped it down, reinforced the chassis, restructured the body, added custom paint and chrome, cut the front end to give it a chopper look and fabricated almost everything from handle bars to foot controls. It took him six months to convert this bike into his dream machine. “I was a science student in school. A number of laws and mechanics are applicable to what I do today. I managed to mix a little bit of common sense with what I read about motorcycle designs and then over-engineered it,” says Varde.

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First steps

The bike that Varde customized and modified can now be seen as a beginner’s attempt at best. It was redone with the help of a local technician and fabricator and it took six months and Rs 30,000 to complete it. People were amazed to see the final result. “The bike was big, long, bright orange in color, had lots of chrome and it garnered a lot of attention,” recalls Varde, talking of his creation.

Stand-up comedian Ash Chandler got interested in the motorcycle and wanted Varde to build him one in 2005. That is when Varde rented a small space and started working on what was his first customer project. Later, a poultry shop owner approached Varde. Gradually, word spread about Varde’s abilities as soon as his redesigned creations started cruising the roads of Mumbai. An auto magazine featured him, which led to further publicity. That got him 12 orders.

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During that time, premium motorcycles were largely imported into India and the country did not have any major international brands in this segment.

“You either rode what was available in the market or customized it. That is why my business took off,” explains Varde.

Making of a brand

In 2005, when Varde started off on his own, Chandler suggested a name for his company-Mumbai Motor Cycle Company. Varde and Chandler decided to try out the name for a year but soon realized that the brand needed a more personal connect with its customer.

The name Vardenchi was selected-which in Marathi means, ‘Belonging to a Varde’.

Though there are different types of motorcycles in the market, Varde is most comfortable with modifying a chopper. He explains that a sports motorcycle needs a much higher level of engineering than a chopper. Also, aesthetic art forms work better with a chopper. “You can customize and stylize it according to someone’s personality,” says Varde.

[caption id=“attachment_685857” align=“alignleft” width=“380”] Service will remain a key part of Varde’s manufacturing initiative. Any motorcycle that is sold will be serviced every two months[/caption]

Last year, Vardenchi got an opportunity which spun off an allied business idea. He worked on 50 big motorcycles in 2012. This encouraged Varde to dabble with kits and accessories for motorcycles. However, the cost of parts and fittings were sky high and Varde shelved the plan.

“We are in the services industry and there are certain limitations. A customer must have a Royal Enfield motorcycle for me to customize it. Else, I will have to help the customer get a Royal Enfield in order to customize it. Royal Enfield motorcycles have a waiting period of sometimes as long as six to eight months because of its phenomenal demand,” informs Varde.

A customer who owns a Royal Enfield motorcycle and wants to customize it can choose from a basic package costing Rs. 1.8 lakh. The price goes up depending on the range of customization, which can go all the way up to Rs. 4.5 lakh. “We also customize motorcycles for brands. We did it for Red Bull, Tron, and the Sunburn Festival. These cost more since the level of customization is higher,” points out Varde.

The big move

Besides customizing, Varde wants to focus on the manufacturing aspect of the business.

“We want to custom manufacture a motorcycle. This means we will retain the format wherein the customer approaches us and tells us what he wants. In return, we will start from scratch by manufacturing and delivering the bike to the customer’s preference,” explains Varde.

From the 50 bikes that Vardenchi customizes today, getting into manufacturing would mean the company can scale up at least 10 times. “We will not manufacture the engines, instead we will tie up with engine manufacturers like Royal Enfield. The Royal Enfield 500cc EFI engine is a brilliant engine and we are very happy with it. The gear assembly and transmission is ideal. We have already spoken to the company and they are very supportive of it,” says Varde.

In FY12, Vardenchi made revenues of about Rs 1 crore, but Varde is unsure about revenues this year since the company is in the midst of a major transition. “We are launching our motorcycles in the market and the entire effort is directed towards setting up of the project. Our current revenues might take a slight dip as a lot of effort is going into manufacturing,” says Varde.

Vardenchi is investing about Rs 50 crore through equity to set up a state-of-the-art plant in either Gujarat or Maharashtra. The staff strength, currently at 20, is expected to go up to 70 once the plant is up and running. Varde plans to launch his first set of bikes by the end of this year.

While he is tightlipped about the project, Varde reveals, the plant would house machinery which would cater to every aspect of motorbike making-fabrication, chrome, etc. To start off, Vardenchi will soon open dealerships across seven metros and put in place a robust marketing and branding system.

“I see a big demand for our kind of bikes and expect the premium segment of motorbikes to grow substantially in the next few years,” says Varde. This will put Vardenchi in direct competition with cult bike makers like Harley Davidson, which has a presence in India, and Triumph, which will begin operations soon. Varde, however, is unfazed.

“Not one motorcycle of ours resembles the other. We are not trying to sell a motorcycle but the experience of creating one, owning it and passing it on to future generations,” points out Varde.

Up and about

Varde is also setting up a proprietary design software, which will enable a customer to customize a bike according to his liking. When a customer walks in, he would be asked to fill up a questionnaire that would bring out his personality and make it easier to translate it on to the bike.

“We enter certain criteria into the software and it comes up with a design of the bike. The design can be tweaked further and if approved, it goes in for production,” says Varde, adding, this method emphasizes the significance of dealers in the scheme of things in the company.

Varde is mindful that everyone expects an Indian brand to be cheap and fun, too. More so from the auto industry, since it has not been able to deliver any lifestyle product to date. “The challenge is not the manufacturing but the marketing and communication aspects. A lot of people are aware we customize Royal Enfield motorcycles, but our challenge now is to communicate that we are a manufacturer now and not a mere customization company,” says Varde.

Eye on services

Service will remain a key part of Varde’s manufacturing initiative. Any motorcycle that is sold will be serviced every two months. The customer would also get the option to customize further in future to keep the bike ‘alive’ and pristine.

“I would concentrate more on ensuring that we get the service aspects correct as we spread across India,” reiterates Varde.

People who do not want to go through this process and want to buy a bike which has already been designed by the company, would be able to do so too. A base product would cost anywhere between Rs 3.5 lakh to Rs 4 lakh, ex-showroom.

According to Yaresh Kothari, Research Analyst-Automobile, Angel Broking, demand remains strong in the greater than 250cc segment motorcycles. Its contribution to the total domestic motorcycle market is increasing even as overall two-wheeler demand remains weak.

“The share of the segment has increased from seven percent in FY2012 to 11 percent in year-to-date FY2013. The aspiration levels of the Indian consumers are on the rise which is driving the demand in the segment,” says Kothari.

Varde says he wants Vardenchi to be a brand which will signify its exclusivity and also be a dream machine. He aims at the product being known as suited to a customer’s personality.

“In future, if you see a Vardenchi at the next traffic light, it should look like an extension of the rider,” says Varde, of his handiwork.

A wish that is not far-fetched considering clients are willing to pay for a desire on wheels.

(This was first published in Entrepreneur magazine)