A two-wheeler reflects the stops and starts of Indian capitalism

WHEN THE new Jawa motorcycle was unveiled last November, two years after the once-popular two-wheeler’s return to India was first revealed, its website crashed. Millions of Indian motorheads wanted to catch a glimpse of the original Czechoslovak design reimagined for the 21st century. An undisclosed (but modest) number of online orders were later filled in an instant.

This triumphant return is the latest in a series of Jawa’s stops and starts, which mirror India’s post-independence economic development. In the 1950s then-high-tech motorcycles were imported from Czechoslovakia. A decade later steep tariffs forced production to move to India, and then, in 1971, further restrictions on foreign products prompted it to be renamed Yezdi. The 1980s ushered in efficient Japanese-led joint ventures, boosted from 1991 by liberalisation. These, together with Royal Enfield, a colonial-era brand with a cult following which has been in Indian hands since the 1950s, outcompeted Jawa, which was also under pressure at home in Europe from a botched nationalisation (and the fission of Czechoslovakia in 1993). The last Yezdi left the firm’s factory in Mysore in 1996.

Jawa’s swift resurrection reflects how Indian business has changed since the Licence Raj. In 2015 Anupam Thareja, a former director of Royal Enfield, forged a joint venture with Anand Mahindra, who heads a family-controlled conglomerate. Mahindra & Mahindra makes tractors, cars and scooters but has lagged behind in motorcycles. Jawa, whose brand rights in India the petrolhead investors had purchased, offered an inroad to the premium segment. Fancier models—with bigger engines and a price tag of 200,000 rupees ($2,900) or so—account for most of the profits in India’s two-wheeler market, which is approaching 20m units a year. A recent slide in the fortunes of Royal Enfield’s parent, Eicher Motors, left an opening.

Jawa’s long-term prospects depend on harnessing nostalgia while eradicating performance flaws. Fiat 500 and MiniCooper prove that rebooting iconic vehicles is possible; Volkswagen’s unloved new Beetle shows how it can misfire. Overwhelming demand suggests Jawa ticks the sentimental box. Mr Thareja promises that the new model goes faster and burns greener than the original. Mahindra’s nationwide network should help with parts and servicing.

Yet the reboot also shows that India’s ride to a free-market paradise is incomplete. After enterprising types created an independent auction site for the coveted online purchase rights, Jawa made them non-transferable. Jawa lovers must instead deposit 5,000 rupees with one of 100 dealers—and hope for a call.

This post was originally posted at https://www.economist.com/business/2019/03/23/a-two-wheeler-reflects-the-stops-and-starts-of-indian-capitalism.

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