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| Edited By: K V Ramana |Source: DNA |Updated: Mar 30, 2018, 03:49 AM IST
Eicher Motors, the automotive manufacturing arm of the Eicher Group, is likely to set up its biggest-ever facility to manufacture its flagship motorcycle brand Bullet in Andhra Pradesh.
The company has initiated talks with the state government for this.
According to sources, while the state government is in favour of the proposal, a decision on the issue of incentives is pending.
The company has identified Sri City, a new special economic zone at Satyavedu in Chittoor district, for setting up the plant and the total investment is estimated to be about Rs250 crore.
Royal Enfield, a unit of Eicher Motors, manufactures Bullet and is currently producing six different models ranging from 300cc to 600cc at its Chennai plant, which has an annual installed capacity of about 39,000 motorcycles.
As per the talks the company officials had with chief minister N Kiran Kumar Reddy recently, Eicher will implement the Royal Enfield project at Satyavedu in two phases.
The first phase lasting three years will see the company creating a facility for manufacturing 150,000 bikes per annum. The second phase of another two years after that will witness the production expanding to 2.5 lakh per annum.
Towards this, the company envisages a capital expenditure of Rs 250 crore with Rs 150 crore in the first phase and Rs 100 crore in the second phase. The investments include Rs 70 crore on new product toolings, which the company will be incurring to develop components for new models.
The plant is expected to come up in about 75 acres to be leased out from Sri City. “The government has asked Eicher to ensure that the vendors too set up their facility in the adjoining location so that there would be an ecosystem of ancillaries and component manufacturers for attracting future investments in the sector,” the source said.
The company has asked the government to consider the proposal as “mega project”, which will provide additional benefits including various incentives, reimbursements and subsidised power as per the state’s industrial policy.
If it materialises, Royal Enfield will bring in the first-ever motorcycle manufacturing project to the state, which has been waiting for a breakthrough in the automobile investments. After a failed attempt to rope in Volkswagen to set up its car unit, the state has not succeeded in attracting any investments in the sector.
