CHENNAI, India - Royal Enfield this week started commercial production at a second factory that will reportedly help the manufacturer produce 175,000 motorcycles this year.
The factory is in the city of Oragadam in the Indian state of Tamil Nadu. Spread over 50 acres, the plant starts with a production capacity of 150,000 units per year and will produce the full range of Royal Enfield motorcycles.
“At Royal Enfield we have recorded a major milestone today with this plant at Oragadam becoming operational,” said Siddhartha Lal, CEO of Eicher Motors Ltd. (of which Royal Enfield is a division), after personally rolling out the first motorcycle from the plant (pictured).
Royal Enfield has reported a sales growth rate of more than 50 percent for each of the last two years.
“We have been extremely successful in stretching the capacity of our existing 60-year-old plant to record levels — achieving production of over 12,000 motorcycles in the month of March 2013,” Lal noted. “Yet the demand for our motorcycles has continued to outpace the supply. Therefore we have conceived of this new facility on a much larger tract of land and created a master plan that can take the eventual production here to over 500,000 per year.”
Royal Enfield plans a second phase of expansion at the Oragadam plant that will increase overall production capacity to 250,000 motorcycles in 2014. “With this new facility, we now have the ability to scale our production quantity quickly in response to market demand,” Lal said.
Royal Enfield also designed the new plant to ensure product quality. “We have re-tooled many of the parts that make up our motorcycles — so that they are of exacting accuracy and finish,” Lal said. “The substrate quality of the sheet metal parts, for example, is now at par with the best in the world.”
Talking about Royal Enfield’s distribution plans, Lal said, “While we are adding new models and new dealerships in the Indian market, which is fuelling our growth, we are also working on building our presence globally. Higher investments into brand and distribution, as well as new products that are very appealing to international markets are going to be key for us to achieve global leadership in the midsize motorcycle category.” (Continued.)