Eicher Motors Ltd plans to invest about ₹1,250 crore across its two-wheeler and commercial vehicle businesses during 2017-18.
The company is earmarking ₹ 800-crore investment for Royal Enfield and ₹ 450 crore for VECV’s commercial vehicle business growth.
“Royal Enfield has been investing in building capacity and capabilities. We will be investing ₹ 800 crore in FY 2017-18 towards our upcoming manufacturing facility at Vallam Vadagal near Chennai, product development, two technical centres in UK & India and towards market expansion,” said Siddhartha Lal, Managing Director & CEO, Eicher Motors
Royal Enfield’s third manufacturing facility is expected to commence production in August 2017. With its third plant, the combined annual capacity of Royal Enfield is expected at 825,000 motorcycles in 2017-18.
Lal indicated that the immediate business outlook remained strong for its motorcycle business and Royal Enfield would continue to grow consistently, competitively and profitably towards leading and expanding the mid-sized motorcycle segment globally.
In April this year, Royal Enfield had opened a direct distribution subsidiary in Brazil, as well as its first exclusive store in Sao Paulo. With this, the company has 25 exclusive stores in its international markets.
VECV, an equal commercial vehicle joint venture of Eicher Motors and Volvo Group, will invest ₹ 450 crore in FY 2017-18 across all areas of its business.
“The CV industry has had a tumultuous year in 2016-17 where a number of issues like demonetisation, rising fuel costs and BS-IV transition affected the demand. Despite these challenges, VECV outpaced the industry, across all segments by recording a 12.6 per cent growth against the industry growth of four per cent and selling highest ever 58,604 units for the financial year,” Lal said.
“The advent of the new GST regime will provide further impetus to sales of new range of modern Pro-Series trucks and VECV will be able to grow its market share further in the coming months,” he added.