Royal Enfield looks to double capacity to 9 lakh per year

Eicher Motors plans to double the manufacturing capacity of its two-wheeler arm Royal Enfield to 9 lakh units per annum by 2018 to meet robust demand of its motorcycles.

The company is already in the process of raising production capacity of Royal Enfield to 4.5 lakh units per annum by the end of this year.

"The board at Eicher Motors accorded in-principle approval for additional capacity creation at Royal Enfield. The additional capacity will primarily come from the first phase of Royal Enfield's third manufacturing facility at Vallam Vadagal in Tamil Nadu," the company said in a statement.

This will take the combined capacity of Royal Enfield to 9,00,000 motorcycles annually by 2018, it added. The company sells various popular models like Bullet, Classic, Thunderbird and Continental GT. It, however, did not share planned investments for the expansion.

"Royal Enfield continues to have a strong demand for its products and has a very strong order book. We are on track to produce 4,50,000 motorcycles by the end of this year," Eicher Motors MD Siddhartha Lal said. Royal Enfield is continuing to expand its retail footprint in India.

"By the end of the year, we plan to have 500 dealerships across India in a single unified retail identity," Lal said.

In the last quarter, Royal Enfield has taken some significant steps as part of its growth strategy and focused international thrust of leading and expanding the mid-sized motorcycle segment (250-750cc) globally.

Towards this, Royal Enfield announced its first direct distribution subsidiary outside India, in North America in August this year.

"North America is a nodal market for motorcycles and one of the biggest in value terms. Given its critical importance to our global ambitions, we have decided to operate our wholly-owned subsidiary there," Lal said.

Headquartered in Milwaukee, Wisconsin, the Royal Enfield team will be led by Rod Copes, President Royal Enfield North America, and will directly conduct all market development and sales activities.

"We will open our first exclusive branded retail store in the United States in Milwaukee in first half of 2016", Lal said.

In August, Royal Enfield also announced its entry in Indonesia which is the third largest volume motorcycle market in the world. "Our first exclusive store in Jakarta will be launched later this month," Lal said.

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