Enfield will double capacity in 3 years

Royal Enfield, the maker of iconic motorcycle brands such as the Classic 500 and Thunderbird, is planning to double manufacturing capacity to one lakh units with an investment close to Rs65 crore in the next three years.

The company on Wednesday unveiled a new engine platform called Unit Construction Engine (UCE) which will now power the Classic 500.

The bike will continue to have a single cylinder engine with fuel injection system and Royal Enfield is promising more of its bikes on the new engine platform in the coming months.
Royal Enfield is the motorcycle division of Eicher Motors and has seen some very tough times, with Eicher CEO Siddhartha Lal acknowledging that the business was near bankruptcy in 2000 and could be turned around only by 2003-04.

“But now, we are doing quite well. Sales are 4,500-5,000 units a month and the nine-month topline is Rs 300 crore plus. We are logging operating profits of over 10% and the business has seen a CAGR of 15-20% in the last 3-4 years”.

The new Classic model unveiled on Wednesday was first launched in Europe late last year and then in the US market a few months later. Some 2,000 units have so far been sold overseas, but the company’s main market has always been India, which accounts for more than 90% of total sales.

Lal said with the new engine platform the focus would be on exports, and new markets such as Latin America, the Middle East and Africa would be targeted. Royal Enfield is also readying to venture into California, the toughest two-wheeler market in terms of emission and safety standards, with its monsters.