Royal Enfield to invest Rs 800 crore in expansion, subsidiaries in Indonesia and Thailand in FY2019

Royal Enfield has announced plans to invest Rs 800 crore in 2018-19 including commencement of construction of Phase-2 of the Vallam Vadagal plant in Tamil Nadu this year as well as in setting up subsidiaries in Indonesia and Thailand.

Speaking on the company’s investment plans, Siddhartha Lal, MD and CEO, Eicher Motors, said, “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. We will also complete construction of our Technology Centre in Chennai this year, and invest further in the development of new products to meet upcoming regulations and to expand our portfolio for our global markets.”

Royal Enfield claims that its motorcycles have found strong traction in South East Asia since entering the region two years ago. To further strengthen the brand and accelerate market development activities, the company has decided to set up wholly owned subsidiaries in Indonesia and Thailand in 2018-19. “We continue to strengthen our offerings with new models and variants such as the new Thunderbird X, the Classic Gunmetal Grey, Stealth Black and Redditch series, as well as our soon-to-be-introduced Twins. With a wide distribution network in India, a growing international presence and state-of-the-art capabilities in product development, Royal Enfield is well positioned to grow the middleweight motorcycle segment globally,” said​ Lal.

In 2018-19, with the first phase of the Vallam Vadagal factory enjoying its first full year of operations, and with productivity optimisation at its Oragadam plant, Royal Enfield will have an annual production capacity of about 950,000 units.

In FY2017-18 the company introduced three models – the Thunderbird X, Classic 350 and Classic 500. In FY2019, it sold a  total of 651,107 units, up 23 percent; in March 2018, it sold 74,209 units (+27%) or around 9 percent of its cumulative sales. On the exports front it shipped 666,490 units, an increase of 23 percent YoY.

The motorcycle manufacturer currently has a total installed capacity of 825,000 motorcycles from its three plants in Tamil Nadu (Chennai, Oragadam and Vallam Vadagal).

Also read: Brembo Brake India sets up new plant in Chennai for Royal Enfield

Royal Enfield Classic 350 and 500 in Gunmetal Grey and Stealth Black

Interview: Siddhartha Lal, CEO, Eicher Motors