Royal Enfield expanding capacity with a second plant at Oragadam corridor

Royal Enfield Motors, which makes the iconic Bullet, is expanding capacity with a second plant in the Oragadam manufacturing corridor, near Chennai.

Eicher Motors, which owns Royal Enfield in India, has acquired a 50-acre plot at Vallam Vadagal, 10 km from the existing facility at Oragadam, where Yamaha is also setting up its factory.

The company acquired the 50-acre plot at a cost of Rs57 crore, where it plans to house its third factory in Chennai, and second one at the Oragadam industrial belt.

Royal Enfield is ramping up the production capacity from 3 lakh units at Thiruvottiyur and 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,'' Siddhartha Lal, managing director and CEO, Eicher Motors said.

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 domestic sales and exports of over 3 lakh units (1.78 lakh units in 2013).

The second phase of expansion is expected to be completed by the middle of the next year, following which it would have an installed capacity of 6,00,000 units per year

The proposal for a new plant is a part of its domestic-cum-export expansion strategy.

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.