Motorcycle manufacturer Royal Enfield has planned a capital expenditure of ₹800 crore for the year 2018-19. The proposed capex will include the commencement of construction of Phase-2 of the Vallam Vadagal plant near Chennai this year. “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.
In 2018-19, with the first phase of the Vallam Vadagal factory completing its first full year of operations, and with productivity optimisation at its Oragadam plant, Royal Enfield will have an annual production capacity of about 9,50,000 units.
In 2017-18, Royal Enfield's total domestic sales stood at 801,230 units, up 23 per cent over 2016-17 volume of 651,107 units. Exports grew by 25 per cent at 19,262 units. “We continue to strengthen our offerings with new models and variants such as the new Thunderbird X, the Classic Gunmetal Grey, Stealth Black and the Redditch series, as well as our soon-to-be-introduced Twins. With a wide distribution network in India, a growing international presence and modern capabilities in product development, Royal Enfield is well positioned to grow the middleweight motorcycle segment globally,” said Lal.
The company will also complete construction of its technology centre in Chennai this year, and invest further in the development of new products to meet upcoming regulations and to expand its portfolio in global markets.
To set-up subsidiaries in Indonesia and Thailand
To further strengthen the brand and accelerate market development activities, Royal Enfield has decided to set up wholly-owned subsidiaries in Indonesia and Thailand in 2018-19.