Royal Enfield eyes Chennai for its third plant

Royal Enfield has eyed Chennai as its location for its new manufacturing plant. The motorcycle maker has acquired a 50 acre plot at an investment of Rs 57 crore at Vallam Vadakal near Chennai to set up a brand new facility.

The company, part of New Delhi-based Eicher Motors, already has a production unit at Oragadam  near Chennai. The forthcoming new plant is expected to have a production capacity of four lakh units in 2014 and Royal Enfield aims to ramp it up to six lakh units in the subsequent year.

Commenting on the new facility, Siddhartha Lal, Managing Director and CEO, Eicher Motors Limited, said, "At Royal Enfield, we have set our sights on becoming the leaders in global mid-sized motorcycling segment and we are working towards it persistently. While we continue to ramp up capacity at our Oragadam plant month on month; we have recently acquired a 50 acre plot in Vallam Vadagal, near Chennai, Tamil Nadu. This plot is located within 10km of our Oragadam facility. This prepares us for future expansion to meet the growing demand of our motorcycles worldwide."

Royal Enfield clocked sales of 26,039 units in October, an increase by 47.45 percent as compared to 17,659 units in the same month last year. Domestic sales have also surged by 47.4 per cent at 25,510 units last month as opposed to 17,306 units in the same month last year, the company said in a statement. Exports during the month stood at 529 units as against 353 units last year, up 49.85 per cent.

The motorcycle maker plans to build this new manufacturing facility as part of its domestic/exports expansion strategy. Royal Enfield also plans o expand its dealer network to about 400 outlets by the end of 2014, and 500 outlets by 2015.