Royal Enfield to set up second project at Oragadam corridor

Siddhartha Lal  

Royal Enfield Motors, the maker of iconic Bullet, has decided to set up a second project in the Oragadam manufacturing corridor, near here.

The company, which is a part of Eicher Motors, has acquired a 50 acre plot at a cost of Rs.57 crore at Vallam Vadakal near Chennai (where Yamaha is also setting up its factory) to set up a brand new plant. The upcoming unit will be its third factory in Chennai, and second one at the Oragadam industrial belt.

The new plot is located about 10 km from its Oragadam factory. Its first factory is located at Thiruvottiyur. Royal Enfield is ramping up the production capacity from 3 lakh units (Thiruvottiyur + Oragadam) to 4 lakh units in 2015 and 6 lakh 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.

Details such as proposed investments, capacity and job potential will be announced in due course..

Royal Enfield’s two-wheeler sales continue to zoom as the company recorded a 76 per cent rise in sales at 2.41 lakh units during January-September 2014. It is expected to end the calendar year with total sales (domestic+exports) of over 3 lakh units (1.78 lakh units in 2013).

The proposal for a new plant is a part of its domestic-cum-export expansion strategy. Enshrined in this strategy is also a desire to enrich customer experience at retail stores and export markets.

It will also ramping up its dealer network to about 400 outlets by the end of 2014, and 500 outlets by 2015 from 300 in early 2014.

Though its exports are at a nascent 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 designerfor 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 250cc to 650 cc) in the near future.

For the third quarter ended September 30, 2014, Eicher Motors posted a consolidated net profit of Rs.186 crore, up 28 per cent when compared with Rs.146 crore in the year-ago period. Its total income registered a growth of 31 per cent at Rs.2,275 crore (Rs.1,736 crore).

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Printable version | Sep 28, 2021 2:12:36 AM |

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