Report - 600 crore rupee investment set aside for next 2 years to increase Royal Enfield production

Eicher has announced a Rs 600 crore investment in two years into its Royal Enfield manufacturing facility at Oragadam, Chennai in order to increase production capacity to around 5 lakh units by 2016 from both its plants.

A report on The Hindu says that the investment will also be to create new platforms and products, apart from improving R&D and infrastructure. As of the end of 2013 (Eicher follows the calender year), the company made 1.73 lakh bikes at its Oragadam facility.

As of last year, the production target was set at 2.5 lakh, but due to the increased demand, says Eicher's MD and CEO Siddhartha Lal, the revised target rests at 2.8 lakh units. Lal also said that the company will not shift focus from the medium-sized segment, between the 250 cc and 750 cc for motorcycles, saying that over the next 5-7 years, the company's complete focus would be on this segment. The company has no intention to go above or below this segment.

Royal Enfield will also increase its dealer count, from the current 300 to 500 in the next 2-3 years.

The 250 cc - 750 cc class is getting increasingly crowded with the launch of a slew of bikes of late, like the Suzuki Inazuma and KTM Duke 390, with more products like the Hero HX 250R, Bajaj Pulsar SS400 and CS400 being revealed at the Auto Expo 2014. It's not only sportsbikes, but also cruisers like the Hyosung Aquila 250 and the Harley Davidson Street 750 that are entering the segment.

[Source - The Hindu]