Royal Enfield Motors, the maker of the iconic Bullet and the popular new GT, has decided to set up a second project in the Oragadam manufacturing corridor.
The company, which is a part of Eicher Motors, has acquired a 50 acre plot at Vallam Vadakal near Chennai to set up a brand new plant (where Yamaha is also setting up its factory) . The upcoming unit will be its third factory in Chennai, and second one at the Oragadam industrial belt. The new plot is located about 10km from the other Oragadam factory. Its first factory is located at Thiruvottiyur.
Royal Enfield is ramping up the production capacity from 300,000 units (Thiruvottiyur + Oragadam) to 400,000 units in 2015 and 600,000 units in the subsequent year.
“This prepares us for future expansion to meet the growing demand of our motorcycles worldwide,” according to Siddhartha Lal, Managing Director and CEO, Eicher Motors.
Royal Enfield’s two-wheeler sales continue to grow as the company recorded a 76 per cent rise in sales at 241,000 units during January-September 2014. It is expected to end the calendar year with total sales (domestic+exports) of over 300,000 units, compared to 178,00 units in 2013.
The proposal for a new plant is a part of its domestic/export expansion strategy. Enshrined in this strategy is also a desire to enrich customer experience at retail stores and export markets.
It will also be ramping up its dealer network to about 400 outlets by the end of 2014; and 500 outlets by 2015, up from 300 in early 2014.
Though its exports are at a developing stage now, it has embarked on several events in various markets, including the U.K, the U.S. and Europe, to boost shipments in the coming years. The company has also roped in Pierre Terblanche, a popular designer for motorcycles and served as the head of design for Ducati for over a decade.
The expansion plans are a part of its conscious goal to make a transition from a largely Indian brand to that of a global one in mid-size motorcycle market (above 250 cc to 650 cc) in the near future.
For the third quarter ending September 30, 2014, Eicher Motors posted a consolidated net profit up 28 per cent when compared with the previous year period. Its total income registered a growth of 31 per cent, so look for more from Royal Enfield over the coming months.