Royal Enfield to invest Rs 800 crore to expand capacity in Tamil Nadu

Domestic cruiser bike manufacturer Royal Enfield on Tuesday announced it would spend Rs 800 crore in 2018-19 largely to begin of construction of Phase-2 of the Vallam Vadagal plant in Tamil Nadu.

The company, would also set up wholly owned subsidiaries in Indonesia and Thailand during the year, as part of its strategy to transform itself into a global middle-weight motorcycle leader by tapping emerging markets. Enfield closed fiscal 2018 with a 23 per cent growth in sales in the domestic market at over 800,000 units and a 25 per cent jump in exports. It is already a global leader in mid-sized motorcycles classified as those with engine capacity between 250-750cc, but more than 97 per cent of its sales are in the Indian market.
 
"Our demand continues to exceed supply, and we continue to see strong growth from all our markets. Therefore, we have decided to expand our production capacity with the second phase of our Vallam Vadagal plant near Chennai, Tamil Nadu," said  Siddhartha Lal, MD & CEO, Eicher Motors Ltd.  "We will also complete construction of our Technology Centre in Chennai this year, and invest further in the development of new products to meet upcoming regulations and to expand our portfolio for our global markets."
 
While incremental volumes from phase 2 at Vallam will only be realised much later, the company said during fiscal 2019 it would be able to achieve production of 950,000 bikes, thanks to the first phase of the Vallam Vadagal factory enjoying its first full year of operations, along with productivity optimization at its Oragadam plant.

"We continue to strengthen our offerings with new models and variants such as the new Thunderbird X, the Classic Gunmetal Grey, Stealth Black and Redditch series, as well as our soon-to-be-introduced Twins. With a wide distribution network in India, a growing international presence and state-of-the-art capabilities in product development, Royal Enfield is well positioned to grow the middleweight motorcycle segment globally," Lal added.