Royal Enfield has announced that it is going to pump in Rs. 800 Crore in capital expenditure for FY 2018-19. A major part of the 800 crore investment will go in the construction of the Phase-2 of its Vallam Vadagal production plant in Tamil Nadu. The second phase once completed, will improve Royal Enfield production capacity by manifold.

The Indian two-wheeler motorcycle market is in its mature phase now and demands for larger capacity “luxury” class bikes like the ones designed by Royal Enfield has seen a steep growth in demand. Similarly, other Indian two Wheeler makers like the Bajaj, Mahindra, and others are courting and partnering with heritage brands. In order to bridge the increasing demand-supply gap as well as staying a step ahead of other possible competitors, Eicher Motors Ltd. had to go on an investment drive to increase production capacity.

Royal Enfield

The same sentiments echoed in the press statements from Mr. Siddhartha Lal, MD & CEO, Eicher Motors Ltd. who said,”Our demand continues to exceed supply, and we continue to see strong growth from all our markets. The second phase of our Vallam Vadagal plant near Chennai, Tamil Nadu will expand our production capacity . We will also complete construction of our Technology Centre in Chennai this year, and invest further in the development of new products to meet upcoming regulations and to expand our portfolio for our global markets”

The Act that mandates the presence of ABS across all 125cc+ bikes is effective from this FY 2018-19. The changes required to abide by the mandatory rule are being made across the entire Royal Enfield product portfolio in India. Royal Enfield Classic and Thunderbird will be available with single-channel ABS soon, and Himalayan is most likely to get dual-channel ABS.

Since the last two years, Royal Enfield has managed to build a small yet gradually growing fan-base for itself in the Southeast Asian markets. The leader of the middleweight motorcycle segment in India has plans to set up wholly owned subsidiaries in Indonesia and Thailand in 2018-19. In Siddharth Lal’s own words, “With a wide distribution network in India, a growing international presence and state-of-the-art capabilities in product development, Royal Enfield is well positioned to grow the middleweight motorcycle segment globally”. Mr. Lal was also upbeat about the new Thunderbird X to be launched in three color variants i.e the Classic Gunmetal Grey, Stealth Black and Redditch series as well as soon-to-be-introduced Twins. The Ceo has high hopes pegged on the new offerings from the Indian Automakers factory.

Read also: Royal Enfield Focuses on Quality Ahead of 650 Twins Launch

This Year, Royal Enfield is all set to celebrate the first anniversary of the completion of Phase I of Vallam Vadagal plant. The plant boasts of current production capacity of about 950,000 units. With a staggering growth rate of 23 percent, the plant enabled Royal Enfield to sell around 8.2 lakh motorcycles in FY 2017-18. This was the highest ever recorded sales growth rate for a given Financial Cycle. With the increased production capacity post the completion of the second phase of its Tamil Nadu plant, Royal Enfield will easily scale a constant 15 percent increase in production capacity.