The motorcycle manufacturer plans to increase production capacity to 20 lakh units annually through brownfield expansion at its Tamil Nadu plant by FY 2027-28.
10 Feb 2026 | 281 Views | By Angitha Suresh
Eicher Motors Limited announced on February 10, 2026, that its Board of Directors has approved a capacity expansion plan for Royal Enfield motorcycles. The expansion will increase the company's total production capacity from the current 14.6 lakh units per year to 20 lakh units per year across all plants.
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Eicher Motors Limited announced on February 10, 2026, that its Board of Directors has approved a capacity expansion plan for Royal Enfield motorcycles. The expansion will increase the company's total production capacity from the current 14.6 lakh units per year to 20 lakh units per year across all plants.
The company will invest Rs 958 crore in brownfield expansion at its manufacturing facility in Cheyyar, Tamil Nadu. The expansion will be funded through internal accruals, according to a regulatory filing submitted to the BSE and National Stock Exchange.
The capacity ramp-up will occur in phases, beginning in the first quarter of the financial year 2026-27 and reaching completion by FY 2027-28. Eicher Motors stated that the expansion is intended to meet increasing demand for its motorcycles.
The company's existing manufacturing capacity is operating at close to full utilization, the filing noted. The additional 5.4 lakh units of annual capacity represents approximately a 37 percent increase over current levels. This expansion will be executed at the existing Cheyyar facility through brownfield development, which typically involves expanding operations at an already operational manufacturing site.
The decision to fund the expansion entirely through internal accruals indicates that the company will use its own reserves and profits rather than seeking external financing through debt or equity. This approach suggests the company maintains a strong financial position with sufficient cash flows to support the capital expenditure.
Eicher Motors manufactures Royal Enfield motorcycles, a brand with heritage dating back to 1901. The company has been experiencing demand pressure as its current facilities operate near maximum capacity. Royal Enfield has established itself as a manufacturer of mid-size motorcycles in India and has been expanding its presence in international markets.
The Cheyyar plant in Tamil Nadu is one of several manufacturing facilities operated by Eicher Motors for Royal Enfield production. The company's manufacturing network includes plants across different locations in India. The choice to expand at Cheyyar suggests the site offers suitable infrastructure and logistics advantages for increased production.
Eicher Motors is headquartered in Gurugram, Haryana, with its registered office located in New Delhi. The company secretary, Atul Sharma, signed the regulatory filing submitted to the stock exchanges.