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Royal Enfield to pump in Rs 600 cr for capacity expansion

Friday, 14 February 2014 - 6:00am IST | Place: Mumbai | Agency: DNA
Company revises production target upwards to 280,000 units for 2014.

Eicher Motors - the maker of Royal Enfield bikes - will pump in an additional Rs 600 crore for capacity expansion and development of global products development, besides revising production target upwards to 280,000 units for 2014.

"We will be making an investment of Rs 600 crore in Royal Enfield towards capacity expansion and development of new global product platforms over CY 2014-15. With this, we have also revised our production target upwards to 280,000 units in 2014," said Siddhartha Lal, managing director & CEO, Eicher Motors.

The company, which announced its fourth quarter and full year results ending December 2013, said it is working towards increasing the production of the motorcycles in order to meet the growing demand.

"Given the growing demand for our motorcycles worldwide, we are working towards maximising the production at Oragadam (near Chennai) that will take the eventual production to over 500,000 per year," said Siddhartha Lal, managing director & CEO, Eicher Motors.

The company said that the next phase of expansion at Oragadam is already underway and is expected to be completed by end of calender year (CY) 2015. At a time when most of the other two-wheeler manufacturers are holding back capacity expansion plans, Royal Enfield is increasing capacity on account of strong demand for the vehicles and reduce waiting period. It has registered on-year unit sales growth of 57.03% with sales of 178,121 units in CY 2013 compared to 113,432 units in CY 2012.

The Chennai-based bike manufacturer is currently in the process of enhancing its presence in the global market as it aims to be the market leader in the mid size (250cc-750cc) motorcycle category in the next 5-10 years. The company, which last year opened its second factory in Oragadam near Chennai, is reinventing itself as a global player and is working on new and existing products in order to meet the global requirements.

The company did a global launch of its Continental GT in September last year in UK, which was followed by its India launch in November. It exports to markets like Europe, USA and UK, and is looking at capturing the growing demand for bigger bikes in the emerging markets.

Eicher Motors announced its results on Wednesday, and reported a consolidated net profit growth of 32.3% to Rs 96.2 crore for the fourth quarter ended December 2013, compared to same quarter in the year-ago period.


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