Royal Enfield to invest Rs 600 crore in its production facility

Eicher Motors, the parent company of Royal Enfield has announced that it will be investing Rs 600 crore in its two production facility. This announcement comes shortly after the tremendous performance of the iconic motorcycle brand that saw an 85 per cent rise in demand, selling 64,268 units in the first three months of this year, as compared to just 34,736 units from 1st January to 31st March 2013. Also this expansion can be seen as a move to accommodate two new motorcycles that Royal Enfield is planning for our market. It is rumoured that Royal Enfield is working on a new 400cc motorcycle that is being developed in Japan and should hit our shores by end of 2014. The other bike is expected to be a 700cc twin-cylinder bike that should be launched in 2015.

Currently Royal Enfield has two production facilities at Thiruvottiyur and Orgadam, the money will be pumped into both the plants in a phased manner in the upcoming two years. The bulk of this investment will be done to the Orgadam factory as it is close to five times bigger than the Thiruvottiyur plant and spread across 50 acres. This announcement doesn’t come as a surprise as demand for Royal Enfield motorcycles is on an all-time high both from domestic as well as international market.

With this investment production of motorcycles should receive a boost and this should reduce the waiting period of the bikes but it wouldn’t drop down on an immediate basis. Also, Royal Enfield has set itself a target of producing 2.5 lakh units by end of 2014, which is almost a 50 per cent hike from the 1.13 lakh units it managed to produce last year. Royal Enfield is undergoing a complete transformation, right from the approach to its products to the product line-up itself and recently unveiled its new logo.