Report – 600 crore rupee investment set aside for next 2 years to increase Royal Enfield production

Posted on: Feb 14, 2014 - 12:02pm IST

Eicher has announced a Rs 600 crore investment in two years into its Royal Enfield manufacturing facility at Oragadam, Chennai in order to increase production capacity to around 5 lakh units by 2016 from both its plants.

A report on The Hindu says that the investment will also be to create new platforms and products, apart from improving R&D and infrastructure. As of the end of 2013 (Eicher follows the calender year), the company made 1.73 lakh bikes at its Oragadam facility.

Royal Enfield Continental GT Yellow rear
Royal Enfield’s latest launch was the Continental GT.

As of last year, the production target was set at 2.5 lakh, but due to the increased demand, says Eicher’s MD and CEO Siddhartha Lal, the revised target rests at 2.8 lakh units. Lal also said that the company will not shift focus from the medium-sized segment, between the 250 cc and 750 cc for motorcycles, saying that over the next 5-7 years, the company’s complete focus would be on this segment. The company has no intention to go above or below this segment.

Royal Enfield will also increase its dealer count, from the current 300 to 500 in the next 2-3 years.

Royal Enfield Classic 500 side press shot
Increased demand has made the company revise its production target upwards from 2.5 lakh units to 2.8 lakh units.

The 250 cc – 750 cc class is getting increasingly crowded with the launch of a slew of bikes of late, like the Suzuki Inazuma and KTM Duke 390, with more products like the Hero HX 250R, Bajaj Pulsar SS400 and CS400 being revealed at the Auto Expo 2014. It’s not only sportsbikes, but also cruisers like the Hyosung Aquila 250 and the Harley Davidson Street 750 that are entering the segment.

[Source – The Hindu]

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2 thoughts on “Report – 600 crore rupee investment set aside for next 2 years to increase Royal Enfield production

  1. Sushrut says:

    They badly need to modernize the engines and increase their reliability. Read the user reviews on Royal Enfield’s website and just see how frequently people have reported replacement of parts in very stages of the bikes life.

    Reply
  2. Dr. Nayak says:

    They don’t have to worry about the 350cc below capacity, but definitely above the 750 capacity is a must to survive on long term bases. People who want to spend between $ 4000 to 6000 for such a bike will have lots of choices in the international market place. Just restricting to 750 cc below capacity may hamper their development not only in India but also in the international market. People, who spend such a large amount of cash on a bike that they may use few times a year, are definitely looking at horse power and not just styling!
    Desi Chaiwala’s R&D tips:
    Spending few bucks on a modern LED lighting to accentuate the bike’s appearance will not hurt them.

    Reply

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Karthik
Karthik H

A bit of a car freak and a bike nut, and a fan of trucks and technology too. Expect sharp stories that focus on those four fronts. As always, stay tuned to IndianAutosBlog.com for quick and unassuming updates from across the world.