Royal Enfield to spend Rs 600 crore for capacity expansion

Royal Enfield’s parent company Eicher Motors has announced that it will  pump in Rs 600 crore into  the motorcycle business over the next two years. This money will be spent in product development and manufacturing plants at Oragadam and Thiruvottiyur in Tamil Nadu.

The company is betting big on its new plant in Oragadam which crossed 10,000 units per month market in Q1. More motorcycles will be manufactured once the production capacity is increased. In Phase I the company built a paint shop and vehicle assembly, and now it is building the other phases, including product, manufacturing and other areas, However, this new facility has provided relief to the company as about a year ago it was only operating from its old plant in Thiruvottiyur.

"We have already seen that we have grown 85 per cent in sale and in production approximately is the same over last quarter. So the growth has been extremely substantial over Q1 of last year and we continue to add capacity at a very rapid pace,” said Siddhartha Lal, CEO, Eicher Motors. 

"We are over the hump as far as our capacity catching up with demand concerned. It is still obviously a few months out or may be six months or a year. For the first time we are seeing some waiting periods and orders even in other markets,” he added.