Motorcycle maker Royal Enfield Motors, part of Eicher Motors, will increase its production capacity by about a quarter during this fiscal, according to the company’s annual report.

The company produced and sold about 6.7 lakh units in 2016-17, and the production capacity for 2017-18 is pegged at 8.25 lakh units. The additional capacity will be the result of a new plant being constructed near Chennai.

“Our third manufacturing facility at Vallam Vadagal, Tamil Nadu, is on track for start of commercial production in August,” Siddhartha Lal, Managing Director & CEO, Eicher Motors, said in the latest annual report.

For 2017-18, Royal Enfield intends to invest ₹800 crore in enhancing capacities and capabilities.

Sales of two-wheelers in the 150cc-and-above segment grew to 27 lakh in 2016-17 from 22 lakh in 2015-16, an increase of of 20.1 per cent. Royal Enfield’s market share in this segment grew to 24 per cent from 22.2 per cent during the period.

There is tremendous potential in the domestic market for Royal Enfield, the company said. “We plan to expand our sales and service reach in the country to over 800 dealers covering about 600 towns,” it added.

In 2016-17, the company added about 150 new dealerships, taking the total dealership network to 675.

It has also strengthened its R&D operations in view of its global ambitions in the mid-category (250cc-750cc) of the super bike market.

It has established a technology centre at Leicester, UK, with a team of more than 100 design and development engineers.

It has also started work to build a technology centre in Chennai. This facility will have the latest engine, chassis and component test equipment. It will be ready for engineering, test and industrial design to commence work by September 2018, with final completion and full occupancy in April 2019.

With the establishment of these two technology centres, Royal Enfield hopes its ability to execute long-range product development plans will be enhanced.

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