Royal Enfield which is owned by Eicher Motors has planned for an investment of around Rs. 600 crores in its motorcycle plants in the next two years. The money will be pumped in step by step in the two plants in the next couple of years. This move comes in because the demand has been normal but the supply is way too low. The Thiruvottiyur factory in Tamil Nadu is extremely small in size and cannot produce a substantial amount to keep waiting periods down for the British brand.
The Oragadam facility is five times larger than the factory in Tamil Nadu which has helped Royal Enfield boost production by a significant margin. Royal Enfield is building the Orgadam Factory in phases. In Phase I the company has built a paint shop and a vehicle assembly line. In the next phase it will build the product manufacturing area and other areas. Royal Enfield says they are over the hump as far as their capacity of catching up with demand is concerned. The waiting period will continue to be a few months or may be a year for some bikes and colours.
During the first three months of this year, Royal Enfield sold 64,268 units which made them grow by 85 percent over the same quarter last year. The company is still getting orders in domestic and surprisingly in export markets despite tough competition from Harley-Davidson and Triumph. Consumers are upping their game due to availability of loans and upgrading to premium brands. Royal Enfield is trying very hard to meet consumer demand before they jump away to other brands as all of a sudden, Royal Enfield’s both rivals have come into the market with entry-level products, offering them close to where the Royal Enfield range exists.
